AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 17, 2000
- -------------------------------------------------------------------------------
FILE NOS. 333-93889
811-07467
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PRE-EFFECTIVE AMENDMENT NO. 1/X/
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940
AMENDMENT NO. 16 /X/
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
(Exact Name of Registrant)
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
(Name of Depositor)
ONE ALLSTATE DRIVE
P.O. BOX 9095
FARMINGVILLE, NEW YORK 11738
516/451-5300
(Address and Telephone Number of Depositor's Principal Offices)
MICHAEL J. VELOTTA
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
3100 SANDERS ROAD
NORTHBROOK, ILLINOIS 60062
847-402-2400
(Name, Address and Telephone Number of Agent for Service)
COPIES TO:
RICHARD T. CHOI, ESQUIRE TERRY R. YOUNG, ESQUIRE
FREEDMAN, LEVY, KROLL & SIMONDS ALFS, INC.
1050 CONNECTICUT AVENUE, N.W. 3100 SANDERS ROAD
SUITE 825 SUITE J5B
WASHINGTON, D.C. 20036-5366 NORTHBROOK, IL 60062
Approximate date of proposed public offering: As soon as practicable after the
effective date of the Registration Statement.
Title of Securities Being Registered: Units of Interest in the Allstate Life of
New York Separate Account A under deferred variable annuity contracts.
<PAGE>
THE SCUDDER HORIZON ADVANTAGE VARIABLE ANNUITY
Prospectus dated May __, 2000
Group Flexible Premium Deferred Variable Annuity Contracts
offered by
Allstate Life Insurance Company of New York
One Allstate Drive, Farmingville, New York 11738
through
Allstate Life of New York Separate Account A
Allstate Life Insurance Company of New York ("Allstate New York") is offering
the Scudder Horizon Advantage Variable Annuity, a group flexible premium
deferred variable annuity contract ("Contract"). This prospectus contains
information about the Contract that you should know before investing. Please
keep it for future reference.
The Contract currently offers 11 investment alternatives ("investment
alternatives"). The investment alternatives include 2 fixed account options
("Fixed Account Options") and 9 variable sub-accounts ("Variable Sub-Accounts")
of the Allstate Life of New York Separate Account A ("Variable Account"). Each
Variable Sub-Account invests exclusively in shares of one of the following
mutual fund portfolios ("Portfolios") of Scudder Variable Life Investment Fund
("Fund"):
Balanced Portfolio International Portfolio
Bond Portfolio Large Company Growth Portfolio
Capital Growth Portfolio Money Market Portfolio
Global Discovery Portfolio 21st Century Growth Portfolio
Growth and Income Portfolio
We (Allstate New York) have filed a Statement of Additional Information, dated
May __, 2000, with the Securities and Exchange Commission ("SEC"). It contains
more information about the Contract and is incorporated herein by reference,
which means it is legally a part of this prospectus. Its table of contents
appears on page A-1 of this prospectus. For a free copy, please write us at our
customer service center (P.O. Box 94038, Palatine, IL 60094-4038) or call us at
1-800-833-0194 (Scudder Direct) or 1-800-875-9040 (AARP Investment Program
Members), or go to the SEC's Web site (http://www.sec.gov). You can find other
information and documents about us, including documents that are legally part of
this prospectus, at the SEC's Web site.
The Securities and Exchange Commission has not
approved or disapproved the securities described
in this prospectus, nor has it passed on the
accuracy or the adequacy of this prospectus.
Anyone who tells you otherwise is committing a
federal crime.
The Contracts may be distributed through broker-dealers
IMPORTANT that have relationships with banks or other financial
NOTICES institutions or by employees of such banks. However,
the Contracts are not deposits, or obligations of, or
guaranteed by such institutions or any federal regulatory agency.
Investment in the Contracts involves investment risks,
including possible loss of principal.
The Contracts are not FDIC insured.
The Contracts are only available in New York.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C> <C> <C>
Important Terms
Overview The Contract at a Glance
How the Contract Works
Expense Table
Financial Information
The Contract
Purchases
Contract Features Contract Value
Investment Alternatives
The Variable Sub-Accounts
The Fixed Account Options
Transfers
Expenses
Access To Your Money
Income Payments
Death Benefits
More Information:
Allstate New York
The Variable Account
The Portfolios
Other Information The Contract
Qualified Plans
Legal Matters
Year 2000
Taxes
Performance Information
Statement of Additional Information Table of Contents A-1
</TABLE>
<PAGE>
IMPORTANT TERMS
This prospectus uses a number of important terms that you may not be familiar
with. The index below identifies the page that describes each term. The first
use of each term in this prospectus appears in highlights.
Page
Accumulation Phase
Accumulation Unit
Accumulation Unit Value
Allstate New York ("We")
Anniversary Values
Annuitant
Automatic Additions Program
Automatic Portfolio Rebalancing Program
Beneficiary
Cancellation Period
*Contract
Contract Anniversary
Contract Owner ("You")
Contract Value
Contract Year
Dollar Cost Averaging Option
Dollar Cost Averaging Program
Due Proof of Death
Enhanced Death Benefit Option
Fixed Account Options
Fund
Guarantee Periods
Income Plan
Investment Alternatives
Issue Date
Payout Phase
Payout Start Date
Portfolios
Qualified Contracts
Right to Cancel
SEC
Standard Fixed Account Option
Systematic Withdrawal Program
Valuation Date
Variable Account
Variable Sub-Account
* We will issue you a certificate that represents your ownership
and that summarizes the provisions of the group Contract.
References to "Contract" in this prospectus include certificates,
unless the context requires otherwise.
<PAGE>
THE CONTRACT AT A GLANCE
The following is a snapshot of the Contract. Please read the remainder of this
prospectus for more information.
<TABLE>
<CAPTION>
<S> <C>
Flexible Payments You can purchase a Contract with an initial purchase
payment of $2,500 ($2,000 for "Qualified Contracts,"
which are Contracts issued with qualified plans). Prior
to the Payout Start Date you can add to your Contract
as often as you like. We may limit the amount of each
purchase payment to a minimum of $100 and a
maximum of $1,000,000.
Right to Cancel You may cancel your Contract within 10 days
after receipt (60 days if you are exchanging another
contract for the Contract described in this prospectus)
("Cancellation Period"). Upon cancellation we will
return your purchase payments adjusted, to the
extent federal or state law permits, to reflect the
investment experience of any amounts
allocated to the Variable Account.
Expenses You will bear the following expenses:
o Total Variable Account annual expenses
equal to 0.70% of average daily net
Assets (0.80% if you select the
Enhanced Death Benefit Option)
o Transfer fee of $10 after 12th
transfer in any Contract Year (charge
currently waived)
o State premium tax (New York
currently does not impose one).
In addition, each Portfolio pays expenses
that you will bear indirectly if you invest
in a Variable Sub-Account.
Investment
Alternatives The Contract offers 11 investment
alternatives including:
o 2 Fixed Account Options (which credit
interest at rates we guarantee), and
o 9 Variable Sub-Accounts
investing in Portfolios
offering professional money
management by Scudder Kemper
Investments, Inc.
To find out current rates being paid on the
Fixed Account Options, or to find out how
the Variable Sub-Accounts have performed,
please call us at 1-800-833-0194 (Scudder Direct)
or 1-800-875-9040 (AARP Investment Program
Members).
<PAGE>
Special Services For your convenience, we
offer these special services:
o Automatic Portfolio Rebalancing Program
o Automatic Additions Program
o Dollar Cost Averaging Program
o Systematic Withdrawal Program
Income Payments You can choose fixed
income payments, variable income
payments, or a combination of the
two. You can receive your income
payments in one of the following
ways:
o life income with guaranteed payments
o a joint and survivor life income with
guaranteed payments
o guaranteed payments for a specified
period (5 to 30 years)
Death Benefits If you die before the
Payout Start Date, we will pay
the death benefit described in
the Contract. We also offer an
Enhanced Death Benefit Option.
Transfers Before the Payout Start Date you
may transfer your Contract value
("Contract Value") among the
investment alternatives, with
certain restrictions.
We do not currently impose a charge upon
transfers. However, we reserve the right
to charge $10 per transfer after the 12th
transfer in each "Contract Year," which
we measure from the date we issue
your contract or a Contract
anniversary ("Contract Anniversary").
Withdrawals You may withdraw some or all of
your Contract Value at anytime
during the Accumulation Phase.
Full or partial withdrawals are
available under limited
circumstances on or after the
Payout Start Date.
In general, you must withdraw at least $50
at a time ($1,000 for withdrawals
made during the Payout Phase). A
10% federal tax penalty may apply
if you withdraw before you are 59
1/2 years old.
</TABLE>
<PAGE>
HOW THE CONTRACT WORKS
The Contract basically works in two ways.
First, the Contract can help you (we assume you are the Contract owner) save for
retirement because you can invest in up to 11 investment alternatives and pay no
federal income taxes on any gain until you withdraw any gain. You do this during
what we call the "Accumulation Phase" of the Contract. The Accumulation Phase
begins on the date we issue your Contract (we call that date the "Issue Date")
and continues until the Payout Start Date, which is the date we apply your money
to provide income payments. During the Accumulation Phase, you may allocate your
purchase payments to any combination of the Variable Sub-Accounts and/or Fixed
Account Options. If you invest in the Fixed Account Options, you will earn a
fixed rate of interest that we declare periodically. If you invest in any of the
Variable Sub-Accounts, your investment return will vary up or down depending on
the performance of the corresponding Portfolios.
Second, the Contract can help you plan for retirement because you can use it to
receive retirement income for life and/or for a pre-set number of years, by
selecting one of the income payment options (we call these "Income Plans")
described on pages ____. You receive income payments during what we call the
"Payout Phase" of the Contract, which begins on the Payout Start Date and
continues until we make the last payment required by the Income Plan you select.
During the Payout Phase, if you select a fixed income payment option, we
guarantee the amount of your payments, which will remain fixed. If you select a
variable income payment option, based on one or more of the Variable
Sub-Accounts, the amount of your payments will vary up or down depending on the
performance of the corresponding Portfolios. The amount of money you accumulate
under your Contract during the Accumulation Phase and apply to an Income Plan
will determine the amount of your income payments during the Payout Phase.
The timeline below illustrates how you might use your Contract.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Issue Payout Start
Date Accumulation Phase Date Payout Phase
- ------------------------------------------------------------------------------------------------------------------------------>
You save for retirement
| | |
---->
You buy You elect to receive income You can receive Or you can
a Contract payments or receive a lump income payments receive income
sum payment for a set period payments for life
</TABLE>
As the Contract owner, you exercise all of the rights and privileges provided by
the Contract. If you die, any surviving Contract owner, or if there is none, the
Beneficiary will exercise the rights and privileges provided by the Contract.
See "The Contract." In addition, if you die before the Payout Start Date, we
will pay a death benefit to any surviving Contract owner or, if none, to your
Beneficiary. See "Death Benefits."
Please contact us at 1-800-833-0194 (Scudder Direct) or 1-800-875-9040 (AARP
Investment Program Members) if you have any questions about how the Contract
works.
<PAGE>
EXPENSE TABLE
The table below lists the expenses that you will bear directly or indirectly
when you buy a Contract. The table and the examples that follow do not reflect
premium taxes because New York currently does not impose premium taxes on
annuities. For more information about Variable Account expenses, see "Expenses,"
below. For more information about Portfolio management fees, please refer to the
accompanying prospectuses for the Portfolios.
CONTRACT OWNER TRANSACTION EXPENSES
Withdrawal Charge............................................ None
Annual Contract Maintenance Charge........................... None
Transfer Charge.............................................. $10.00*
*Applies solely to the thirteenth and subsequent transfers within a Contract
Year excluding transfers due to dollar cost averaging or automatic portfolio
rebalancing. We are currently waiving the transfer charge.
VARIABLE ACCOUNT ANNUAL EXPENSES
(as a percentage of average daily net assets deducted from each Variable
Sub-Account)
With the Enhanced Death Benefit Option
Mortality and Expense Risk Charge................................. 0.50%
Administrative Expense Charge......................................0.30%
Total Variable Account Annual Expenses.............................0.80%
Without the Enhanced Death Benefit Option
Mortality and Expense Risk Charge................................. 0.40%
Administrative Expense Charge......................................0.30%
Total Variable Account Annual Expenses.............................0.70%
<PAGE>
PORTFOLIO ANNUAL EXPENSES (after Voluntary Reductions and Reimbursements) (as a
percentage of Portfolio average daily net assets) (1)
<TABLE>
<CAPTION>
Total Annual
Portfolio Management Fees Other Expenses Portfolio Expenses
<S> <C> <C> <C>
Balanced Portfolio 0.47% 0.08% 0.55%
Bond Portfolio 0.47% 0.09% 0.56%
Capital Growth Portfolio 0.46% 0.03% 0.49%
Global Discovery Portfolio(2) 0.98% 0.65% 1.63%
Growth and Income Portfolio 0.48% 0.08% 0.56%
International Portfolio 0.85% 0.18% 1.03%
Large Company Growth Portfolio (3) 0.00% 1.25% 1.25%(4)
Money Market Portfolio 0.37% 0.06% 0.43%
21st Century Growth Portfolio (3)(5) 0.00% 1.50% 1.50%
</TABLE>
[FN]
(1) Expense figures shown are for the period ended December 31, 1999 unless
otherwise indicated.
(2) Beginning May 1, 2000, the Portfolio's adviser has agreed to waive a
portion of its fees to the extent necessary to limit the expenses of the
Global Discovery Portfolio to 1.25% of average daily net assets. This
expense limit will remain in effect until April 30, 2001.
(3) Until April 30, 2001, the Portfolio's adviser has agreed to waive a portion
of its fees to the extent necessary to limit the expenses of the Large
Company Growth Portfolio and 21st Century Growth Portfolio to 1.25% and
1.50% respectively. As a result, actual 1999 expenses without giving effect
to the expense limitation, the total expenses for the Large Company Growth
Portfolio and 21st Century Growth Portfolio were 3.47% and 2.90%
respectively.
(4) Actual 1999 total expenses for the Large Company Growth Portfolio reflect a
.355% reimbursement of fees from the Portfolio's adviser to the Portfolio.
(5) Prior to May 1, 2000, the 21st Century Growth Portfolio was named the Small
Company Growth Portfolio.
</FN>
EXAMPLE
The example below shows the dollar amount of expenses that you would bear
directly or indirectly if you:
o invested a $1,000 in a Variable Sub-Account,
o earned a 5% annual return on your investment, and
o elected the Enhanced Death Benefit Option.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SUB-ACCOUNT 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Balanced $14 $43 $74 $163
Bond $14 $43 $75 $164
Capital Growth $13 $41 $71 $156
Global Discovery $25 $77 $131 $279
Growth and Income $14 $43 $75 $164
International $19 $58 $100 $216
Large Company Growth $21 $65 $111 $240
Money Market $13 $39 $68 $150
21st Century Growth $24 $73 $124 $266
</TABLE>
The example assumes that any fund expense waivers or reimbursement arrangements
are in effect for the time periods presented. The example above does not include
any tax penalties you may be required to pay if you surrender your Contract. The
example does not include deductions for premium taxes because New York currently
does not charge premium taxes on annuities.
Please remember that you are looking at an example and not a representation of
past or future expenses. Your actual expenses may be lower or greater than those
shown above. Similarly, your rate of return may be lower or greater than 5%,
which is not guaranteed. The above example assumes the election of the Enhanced
Death Benefit Option, with a mortality and expense risk charge of 0.50%. If that
option was not elected, the expense figures shown above would be slightly lower.
<PAGE>
FINANCIAL INFORMATION
To measure the value of your investment in the Variable Sub-Accounts during the
Accumulation Phase, we use a unit of measure we call the "Accumulation Unit."
Each Variable Sub-Account has a separate value for its Accumulation Units we
call "Accumulation Unit Value." Accumulation Unit Value is analogous to, but not
the same as, the share price of a mutual fund.
There are no Accumulation Unit Values to report because the Contracts were not
offered prior to the date of this prospectus. The financial statements of the
Variable Account and Allstate New York appear in the Statement of Additional
Information.
<PAGE>
THE CONTRACT
THE CONTRACT OWNER
The Scudder Horizon Advantage Variable Annuity is a contract between you, the
Contract owner, and Allstate New York, a life insurance company. As the Contract
owner, you may exercise all of the rights and privileges provided to you by the
Contract. That means it is up to you to select or change (to the extent
permitted):
o the investment alternatives during the Accumulation and Payout Phases,
o the amount and timing of your purchase payments and withdrawals,
o the programs you want to use to invest or withdraw money,
o the income payment plan you want to use to receive retirement income,
o the Annuitant (either yourself or someone else) on whose life the income
payments will be based,
o the Beneficiary or Beneficiaries who will receive the benefits that the
Contract provides when the last surviving Contract owner dies, and
o any other rights that the Contract provides.
If you die, any surviving Contract owner or, if none, the Beneficiary may
exercise the rights and privileges provided to them by the Contract. The
Contract cannot be jointly owned by both a non-natural person and a natural
person. The maximum issue age of any Contract owner is age 90.
You can use the Contract with or without a qualified plan. A qualified plan is a
retirement savings plan, such as an IRA or tax-sheltered annuity, that meets the
requirements of the Internal Revenue Code. Qualified plans may limit or modify
your rights and privileges under the Contract. We use the term "Qualified
Contract" to refer to a Contract issued with a qualified plan. See "Qualified
Plans" on page __.
ANNUITANT
The Annuitant is the living individual whose life determines the amount and
duration of income payments (other than under Income Plans with guaranteed
payments for a specified period). You initially designate an Annuitant in your
application. If the Contract owner is a natural person you may change the
Annuitant prior to the Payout Start Date. At our discretion, we may permit you
to designate a joint Annuitant, who is a second person on whose life income
payments depend, on or after the Payout Start Date. The maximum issue age of any
Annuitant is age 80.
If the Annuitant dies prior to the Payout Start Date, the new Annuitant will be:
o the youngest Contract owner, otherwise
o the youngest Beneficiary.
BENEFICIARY
The Beneficiary is the person who may elect to receive the death benefit or
become the new Contract owner if the sole surviving Contract owner dies before
the Payout Start Date. If the sole surviving Contract owner dies after the
Payout Start Date, the Beneficiary will receive any guaranteed income payments
scheduled to continue.
You may name one or more Beneficiaries when you apply for a Contract. You may
change or add Beneficiaries at any time by writing to us, unless you have
designated an irrevocable Beneficiary. We will provide a change of Beneficiary
form to be signed and filed with us. Any change will be effective at the time
you sign the written notice, whether or not the Annuitant is living when we
receive the notice. Until we receive your written notice to change a
Beneficiary, we are entitled to rely on the most recent Beneficiary information
in our files. We will not be liable as to any payment or settlement made prior
to receiving the written notice. Accordingly, if you wish to change your
Beneficiary, you should deliver your written notice to us promptly.
If you do not name a Beneficiary, or if the named Beneficiary is no longer
living and there are no other surviving Beneficiaries, the new Beneficiary will
be:
o your spouse or, if he or she is no longer alive,
o your surviving children equally, or if you have no surviving children,
o your estate.
If more than one Beneficiary survives you (or the Annuitant if the Contract
owner is not a natural person), we will divide the death benefit among your
Beneficiaries according to your most recent written instructions. If you have
not given us written instructions, we will pay the death benefit in equal
amounts to the surviving Beneficiaries.
<PAGE>
MODIFICATION OF THE CONTRACT
Only an Allstate New York officer may approve a change in or waive any provision
of the Contract. Any change or waiver must be in writing. None of our agents
have the authority to change or waive the provisions of the Contract. We may not
change the terms of the Contract without your consent, except to conform the
Contract to applicable law or changes in the law. If a provision of the Contract
is inconsistent with state law, we will follow state law.
ASSIGNMENT
We will not honor an assignment of an interest in a Contract as collateral or
security for a loan. However, you may assign periodic income payments under the
Contract prior to the Payout Start Date. No Beneficiary may assign benefits
under the Contract until they are due. We will not be bound by any assignment
until the assignor signs it and files it with us. We are not responsible for the
validity of any assignment. Federal law prohibits or restricts the assignment of
benefits under many types of retirement plans and the terms of such plans may
themselves contain restrictions on assignments. An assignment may also result in
taxes or tax penalties. You should consult with an attorney before trying to
assign your Contract.
<PAGE>
PURCHASES
MINIMUM PURCHASE PAYMENTS
Your initial purchase payment must be at least $2,500 ($2,000 for a Qualified
Contract). You may make purchase payments at any time prior to the Payout Start
Date. We may limit the amount of each purchase payment that we will accept to a
minimum of $100 and a maximum of $1,000,000. We reserve the right to reject any
application.
AUTOMATIC ADDITIONS PROGRAM
You may make subsequent purchase payments of at least $100 ($500 for allocation
to the Fixed Account Options) by automatically transferring amounts from your
bank account. Please consult with your representative for detailed information.
ALLOCATION OF PURCHASE PAYMENTS
At the time you apply for a Contract, you must decide how to allocate your
purchase payments among the investment alternatives. The allocation you specify
on your application will be effective immediately. All allocations must be in
whole percents that total 100% or in whole dollars. You can change your
allocations by notifying us in writing. We reserve the right to limit the
availability of the investment alternatives.
We will allocate your purchase payments to the investment alternatives according
to your most recent instructions on file with us. Unless you notify us in
writing otherwise, we will allocate subsequent purchase payments according to
the allocation for the previous purchase payment. We will effect any change in
allocation instructions at the time we receive written notice of the change in
good order.
We will credit the initial purchase payment that accompanies your completed
application to your Contract within 2 business days after we receive the payment
at our customer service center. If your application is incomplete, we will ask
you to complete your application within 5 business days. If you do so, we will
credit your initial purchase payment to your Contract within that 5 business day
period. If you do not, we will return your purchase payment at the end of the 5
business day period unless you expressly allow us to hold it until you complete
the application. We will credit subsequent purchase payments to the Contract at
the close of the business day on which we receive the purchase payment at our
customer service center located in Northbrook, Illinois. You may mail your
purchase payments to us at P.O. Box 94038, Palatine, Illinois 60094. Our
overnight mail address is 3100 Sanders Road, Suite M4A, Northbrook, Illinois
60062.
We are open for business each day Monday through Friday that the New York Stock
Exchange is open for business. We also refer to these days as "Valuation Dates."
Our business day closes when the New York Stock Exchange closes, usually 4:00
p.m. Eastern Time (3:00 p.m. Central Time). If we receive your purchase payment
after 4:00 p.m. Eastern Time on any Valuation Date, we will credit your purchase
payment using the Accumulation Unit Values computed on the next Valuation Date.
RIGHT TO CANCEL
You may cancel the Contract by returning it to us within the Cancellation
Period, which is the 10 day period after you receive the Contract (60 days if
you are exchanging another contract for the Contract described in this
prospectus). You may return it by delivering it or mailing it to us. If you
exercise this "Right to Cancel," the Contract terminates and we will pay you the
full amount of your purchase payments allocated to the Fixed Account Options. We
will return your purchase payments allocated to the Variable Account after an
adjustment, to the extent permitted by state or federal law, to reflect
investment gain or loss that occurred from the date of allocation through the
date of cancellation. If your Contract is qualified under Section 408 of the
Internal Revenue Code, we will refund the greater of any purchase payments or
the Contract Value.
<PAGE>
CONTRACT VALUE
On the Issue Date, your Contract Value is equal to the initial purchase payment.
Your Contract Value at any other time during the Accumulation Phase is equal to
the sum of the value as of the most recent Valuation Date of your Accumulation
Units in the Variable Sub-Accounts you have selected, plus the value in the
Fixed Account Options.
ACCUMULATION UNITS
To determine the number of Accumulation Units of each Variable Sub-Account to
allocate to your Contract, we divide (i) the amount of the purchase payment or
transfer you have allocated to a Variable Sub-Account by (ii) the Accumulation
Unit Value of that Variable Sub-Account next computed after we receive your
payment or transfer. For example, if we receive a $10,000 purchase payment
allocated to a Variable Sub-Account when the Accumulation Unit Value for the
Sub-Account is $10, we would credit 1,000 Accumulation Units of that Variable
Sub-Account to your Contract. Withdrawals and transfers from a Variable
Sub-Account would, of course, reduce the number of Accumulation Units of that
Sub-Account allocated to your Contract.
ACCUMULATION UNIT VALUE
As a general matter, the Accumulation Unit Value for each Variable Sub-Account
will rise or fall to reflect:
o changes in the share price of the Portfolio in which the Variable
Sub-Account invests, and
o the deduction of amounts reflecting the mortality and expense risk charge,
administrative expense charge, and any provision for taxes that have
accrued since we last calculated the Accumulation Unit Value.
We determine transfer charges (currently waived) separately for each Contract.
They do not affect Accumulation Unit Value. Instead, we obtain payment of those
charges and fees by redeeming Accumulation Units. For details on how we
calculate Accumulation Unit Value, please refer to the Statement of Additional
Information.
We determine a separate Accumulation Unit Value for each Variable Sub-Account on
each Valuation Date. We also determine a separate set of Accumulation Unit
Values reflecting the cost of the Enhanced Death Benefit Option described on
page __ below.
You should refer to the prospectus for the Portfolios that accompanies this
prospectus for a description of how the assets of each Portfolio are valued,
since that determination directly bears on the Accumulation Unit Value of the
corresponding Variable Sub-Account and, therefore, your Contract Value.
<PAGE>
INVESTMENT ALTERNATIVES: The Variable Sub-Accounts
You may allocate your purchase payments to up to 9 Variable Sub-Accounts. Each
Variable Sub-Account invests in the shares of a corresponding Portfolio. Each
Portfolio has its own investment objective(s) and policies. We briefly describe
the Portfolios below.
For more complete information about each Portfolio, including management fees
and risks associated with the Portfolio, please refer to the accompanying
prospectus for the Portfolio. You should carefully review the Portfolio
prospectuses before allocating amounts to the Variable Sub-Accounts. Scudder
Kemper Investments, Inc. serves as the investment adviser to each Portfolio.
<TABLE>
<CAPTION>
<S> <C>
Portfolio: Each Portfolio Seeks:
Balanced Portfolio a balance of growth and income, and also long-term preservation of
capital
Bond Portfolio to invest for a high level of income consistent with a high quality
portfolio of debt securities
Capital Growth Portfolio to maximize long-term capital growth
Global Discovery Portfolio above average capital appreciation over the long term
Growth and Income Portfolio long-term growth of capital, current income and growth of income
International Portfolio long-term growth of capital
Large Company Growth Portfolio long-term growth of capital
Money Market Portfolio to maintain the stability of capital and, consistent therewith,
to maintain the liquidity of capital and to provide current income
21st Century Growth Portfolio* long-term growth of capital
</TABLE>
*Prior to May 1, 2000 the 21st Century Growth Portfolio was named the Small
Company Growth Portfolio.
Amounts you allocate to Variable Sub-Accounts may grow in value, decline in
value, or grow less than you expect, depending on the investment performance of
the Portfolios in which those Variable Sub-Accounts invest. You bear the
investment risk that the Portfolios might not meet their investment objectives.
Shares of the Portfolios are not deposits, or obligations of, or guaranteed or
endorsed by any bank and are not insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board or any other agency.
<PAGE>
INVESTMENT ALTERNATIVES: The Fixed Account Options
You may allocate all or a portion of your purchase payments to the Fixed
Account. You may choose from among 2 Fixed Account Options, including a Standard
Fixed Account Option, and a Dollar Cost Averaging Fixed Account Option ("Dollar
Cost Averaging Option"). Please consult with your representative for current
information. The Fixed Account supports our insurance and annuity obligations.
The Fixed Account consists of our general assets other than those in segregated
asset accounts. We have sole discretion to invest the assets of the Fixed
Account, subject to applicable law. Any money you allocate to a Fixed Account
Option does not entitle you to share in the investment experience of the Fixed
Account.
STANDARD FIXED ACCOUNT OPTION AND
DOLLAR COST AVERAGING OPTION
Standard Fixed Account Option. Purchase payments and transfers that you allocate
to the Standard Fixed Account Option will earn interest for a one year period at
the current rate in effect at the time of allocation or transfer. We will credit
interest daily at a rate that will compound over the year to the effective
annual interest rate we guaranteed at the time of allocation. As each one year
period expires, we will declare a renewal rate which we guarantee for a full
year. On or about the end of each one year period, we will notify you of the new
interest rate(s). Subsequent renewal dates will be every twelve months for each
payment or transfer. The crediting rates for the Standard Fixed Account Option
will never be less than the 3.5% guaranteed rate found in the Contract.
You may withdraw or transfer your money from the Standard Fixed Account Option
at any time on a first-in, first-out basis. If you withdraw money from the
Standard Fixed Account Option, you will receive the amount you requested, minus
any applicable tax withholding.
Dollar Cost Averaging Option. You may establish a Dollar Cost Averaging Program,
as described on page __, by allocating purchase payments to the Dollar Cost
Averaging Option. Purchase payments that you allocate to the Dollar Cost
Averaging Option will earn interest for up to a 1 year period at the current
rate in effect at the time of allocation. We will credit interest daily at a
rate that will compound over the year to the annual interest rate we guaranteed
at the time of allocation. The rate will never be less than 3.5%. You may
transfer each purchase payment and associated interest out of the Dollar Cost
Averaging Option to any of the investment alternatives in up to twelve equal
monthly installments. At the end of 12 months from the date of your allocation
to the Dollar Cost Averaging Option, we will transfer any remaining money to the
Money Market Variable Sub-Account. You may not transfer funds from other
investment alternatives to the Dollar Cost Averaging Option.
We will not assess a transfer charge for transfers made out of the Dollar Cost
Averaging Option, nor will such transfers count towards the 12 transfers you can
make each Contract Year without paying a transfer charge.
We bear the investment risk for all amounts allocated to the Standard Fixed
Account Option and the Dollar Cost Averaging Option. That is because we
guarantee the current and renewal interest rates we credit to the amounts you
allocate to either of these Options, which will never be less than the minimum
guaranteed rate in the Contract. Currently, we determine, in our sole
discretion, the amount of interest credited in excess of the guaranteed rate.
We may declare more than one interest rate for different monies based upon the
date of allocation to the Fixed Account Options. For current interest rate
information, please contact your representative or our customer service center
at 1-800-833-0194 1-800-875-9040 for AARP Investment Program Members).
<PAGE>
INVESTMENT ALTERNATIVES: Transfers
TRANSFERS DURING THE ACCUMULATION PHASE
During the Accumulation Phase, you may transfer Contract Value among the
investment alternatives. You may not transfer any portion of your Contract Value
into the Dollar Cost Averaging Option. Transfers from the Standard Fixed Account
Option are taken out on a first-in, first-out basis. You may request transfers
in writing on a form that we provided or by telephone according to the procedure
described below. We currently do not assess, but reserve the right to assess, a
$10 charge on each transfer in excess of 12 per Contract Year. We treat
transfers to or from more than one Variable Sub-Account at the same time as one
transfer.
We will process transfer requests that we receive before 4:00 p.m. Eastern Time
(3:00 p.m. Central Time) on any Valuation Date using the Accumulation Unit
Values for that Date. We will process requests completed after 4:00 p.m. Eastern
Time on any Valuation Date using the Accumulation Unit Values for the next
Valuation Date. The Contract permits us to defer transfers from the Fixed
Account for up to 6 months from the date we receive your request. If we decide
to postpone transfers from the Fixed Account Options for 10 days or more, we
will pay interest as required by applicable law. Any interest would be payable
from the date we receive the transfer request to the date we make the transfer.
We reserve the right to waive any transfer restrictions.
TRANSFERS DURING THE PAYOUT PHASE
During the Payout Phase, you may make transfers among the Variable Sub-Accounts
to change the relative weighting of the Variable Sub-Accounts on which your
variable income payments will be based. In addition, you will have a limited
ability to make transfers from the Variable Sub-Accounts to increase the
proportion of your income payments consisting of fixed income payments. You may
not, however, convert any portion of your right to receive fixed income payments
into variable income payments.
You may not make any transfers for the first 6 months after the Payout Start
Date. Thereafter, you may make transfers among the Variable Sub-Accounts or make
transfers from the Variable Sub-Accounts to increase the proportion of your
income payments consisting of fixed income payments. Your transfers must be at
least 6 months apart.
TELEPHONE TRANSFERS
You may make transfers by telephone by calling 1-800-833-0194 (Scudder Direct)
or 1-800-875-9040 (AARP Investment Program Members), if you first send us a
completed authorization form. The cut off time for telephone transfer requests
is 4:00 p.m. Eastern Time (3:00 p.m. Central Time). In the event that the New
York Stock Exchange closes early, i.e., before 4:00 p.m. Eastern Time, or in the
event that the Exchange closes early for a period of time but then reopens for
trading on the same day, we will process telephone transfer requests as of the
close of the Exchange on that particular day. We will not accept telephone
requests received at any telephone number other than the number that appears in
this paragraph or received after the close of trading on the Exchange. If you
own the Contract with a joint Contract Owner, unless we receive contrary
instructions, we will accept instructions from either you or the other Contract
Owner.
We may suspend, modify or terminate the telephone transfer privilege at any time
without notice.
We use procedures that we believe provide reasonable assurance that the
telephone transfers are genuine. For example, we tape telephone conversations
with persons purporting to authorize transfers and request identifying
information. Accordingly, we disclaim any liability for losses resulting from
allegedly unauthorized telephone transfers. However, if we do not take
reasonable steps to help ensure that a telephone authorization is valid, we may
be liable for such losses.
DOLLAR COST AVERAGING PROGRAM
Through the Dollar Cost Averaging Program, you may automatically transfer a set
amount at regular intervals during the Accumulation Phase from any Variable
Sub-Account, or the Dollar Cost Averaging Option, to any of the investment
alternatives (except the Dollar Cost Averaging Fixed Account). The interval
between transfers may be monthly, quarterly, semi-annually, or annually.
We will not assess a transfer charge for transfers made under this Program, nor
will such transfers count towards the 12 transfers you can make each Contract
Year without paying a transfer charge.
The theory of dollar cost averaging is that if purchases of equal dollar amounts
are made at fluctuating prices, the aggregate average cost per unit will be less
than the average of the unit prices on the same purchase dates. However,
participation in this program does not assure you of a greater profit from your
purchases under the program nor will it prevent or necessarily reduce losses in
a declining market.
Call or write us for instructions on how to enroll.
AUTOMATIC PORTFOLIO REBALANCING PROGRAM
Once you have allocated your money among the Variable Sub-Accounts, the
performance of each Sub-Account may cause a shift in the percentage you
allocated to each Sub-Account. If you select our Automatic Portfolio Rebalancing
Program, we will automatically rebalance the Contract Value in each Variable
Sub-Account and return it to the desired percentage allocations.
We will rebalance your account each quarter according to your instructions. We
will transfer amounts among the Variable Sub-Accounts to achieve the percentage
allocations you specify. You can change your allocations at any time by
contacting us in writing or by telephone. The new allocation will be effective
with the first rebalancing that occurs after we receive your request. We are not
responsible for rebalancing that occurs prior to receipt of your request.
Example:
Assume that you want your initial purchase payment split among 2
Variable Sub-Accounts. You want 40% to be in the Bond Variable
Sub-Account and 60% to be in the Capital Growth Variable Sub-Account.
Over the next 2 months the bond market does very well while the stock
market performs poorly. At the end of the first quarter, the Bond
Variable Sub-Account now represents 50% of your holdings because of
its increase in value. If you choose to have your holdings rebalanced
quarterly, on the first day of the next quarter we would sell some of
your units in the Bond Variable Sub-Account and use the money to buy
more units in the Capital Growth Variable Sub-Account so that the
percentage allocations would again be 40% and 60% respectively.
The Automatic Portfolio Rebalancing Program is available only during the
Accumulation Phase. The transfers made under the Program do not count towards
the 12 transfers you can make without paying a transfer charge, and are not
subject to a transfer charge.
Portfolio rebalancing is consistent with maintaining your allocation of
investments among market segments, although it is accomplished by reducing your
Contract Value allocated to the better performing segments.
<PAGE>
EXPENSES
As a Contract owner, you will bear, directly or indirectly, the charges and
expenses described below.
MORTALITY AND EXPENSE RISK CHARGE
We deduct a mortality and expense risk charge daily at an annual rate of 0.40%
of the daily net assets you have invested in the Variable Sub-Accounts (0.50% if
you select the Enhanced Death Benefit Option). The mortality and expense risk
charge is for all the insurance benefits available with your Contract (including
our guarantee of annuity rates and the death benefits), for certain expenses of
the Contract, and for assuming the risk (expense risk) that the current charges
will be sufficient in the future to cover the cost of administering the
Contract. If the charges under the Contract are not sufficient, then we will
bear the loss. We charge an additional .10% for the Enhanced Death Benefit
Option to compensate us for the additional risk that we accept by providing the
option.
We guarantee that we will not increase this charge. We assess the mortality and
expense risk charge during both the Accumulation Phase and the Payout Phase.
ADMINISTRATIVE EXPENSE CHARGE
We deduct an administrative expense charge daily at an annual rate of 0.30% of
the average daily net assets you have invested in the Variable Sub-Accounts. We
intend this charge to cover actual administrative expenses. There is no
necessary relationship between the amount of administrative charge imposed on a
given Contract and the amount of expenses that may be attributed to that
Contract. We assess this charge each day during the Accumulation Phase and the
Payout Phase. We guarantee that we will not increase this charge.
TRANSFER CHARGE
We do not currently impose a charge upon transfers among the investment
alternatives. However, we reserve the right to charge $10 per transfer after the
12th transfer in each Contract Year. We will not assess a transfer charge on
transfers that are part of a Dollar Cost Averaging or Automatic Portfolio
Rebalancing Program.
PREMIUM TAXES
Currently, we do not make deductions for premium taxes under the Contract
because New York does not charge premium taxes on annuities. We may deduct taxes
that may be imposed in the future from purchase payments or the Contract Value
when the tax is incurred or at a later time.
DEDUCTION FOR VARIABLE ACCOUNT INCOME TAXES
We are not currently making a provision for taxes. In the future, however, we
may make a provision for taxes if we determine, in our sole discretion, that we
will incur a tax as a result of the operation of the Variable Account. We will
deduct for any taxes we incur as a result of the operation of the Variable
Account, whether or not we previously made a provision for taxes and whether or
not it was sufficient. Our status under the Internal Revenue Code is briefly
described in the Statement of Additional Information.
OTHER EXPENSES
Each Portfolio deducts advisory fees and other expenses from its assets. You
indirectly bear the charges and expenses of the Portfolios whose shares are held
by the Variable Sub-Accounts. These fees and expenses are described in the
accompanying prospectus for the Portfolios. For a summary of these charges and
expenses, see pages ___ above. We may receive compensation from Scudder Kemper
Investments, Inc., for administrative services we provide to the Portfolios.
<PAGE>
ACCESS TO YOUR MONEY
You can withdraw some or all of your Contract Value at any time before the
Payout Start Date and before the Contract owner's death (or the Annuitant's
death if the Contract owner is not a natural person). Withdrawals also are
available under limited circumstances on or after the Payout Start Date. See
"Income Plans" on page __.
The amount payable upon withdrawal is the Contract Value (or portion thereof)
next computed after we receive the request, less any income tax withholding, and
penalty tax, if applicable. You may submit a withdrawal request by writing to
our customer service center, or if you have a valid telephone transfer request
form on file with us, then you may request a partial withdrawal by telephone. We
will pay withdrawals from the Variable Account within 7 days of receipt of the
request, subject to postponement in certain circumstances.
You can withdraw money from the Variable Account and/or the Fixed Account
Options. To complete a partial withdrawal from the Variable Account, we will
cancel Accumulation Units in an amount equal to the withdrawal and any
applicable taxes.
You must name the investment alternative from which you are taking the
withdrawal. If none is named, then the withdrawal request is incomplete and
cannot be honored. If any portion of the withdrawal is to be taken from the
Standard Fixed Account Option, then the amount requested will be deducted on a
first-in, first-out basis.
In general, you must withdraw at least $50 at a time. You also may withdraw a
lesser amount if you are withdrawing your entire interest in a Variable
Sub-Account.
Withdrawals may be subject to tax penalties or income tax. You should consult
your own tax counsel or other tax advisers regarding any withdrawals. We may
waive any withdrawal restrictions. If you request a total withdrawal, we may
require you to return your Contract to us.
POSTPONEMENT OF PAYMENTS
We may postpone the payment of any amounts due from the Variable Account under
the Contract if:
1) The New York Stock Exchange is closed for other than usual weekends or
holidays, or trading on the Exchange is otherwise restricted;
2 An emergency exists as defined by the SEC; or
3) The SEC permits delay for your protection.
In addition, we may delay payments or transfers from the Fixed Account Options
for up to 6 months or shorter period if required by law. If we delay payment or
transfer for 10 days or more, we will pay interest as required by law. Any
interest would be payable from the date we receive the withdrawal request to the
date we make the payment or transfer.
SYSTEMATIC WITHDRAWAL PROGRAM
You may choose to receive systematic withdrawal payments on a monthly,
quarterly, semi-annual, or annual basis. The minimum amount of each systematic
withdrawal is $50. At our discretion, systematic withdrawals may not be offered
in conjunction with the Dollar Cost Averaging Program or the Automatic Portfolio
Rebalancing Program.
Depending on fluctuations in the net asset value of the Variable Sub-Accounts
and the value of the Fixed Account Options, systematic withdrawals may reduce or
even exhaust the Contract Value. Income taxes may apply to systematic
withdrawals. Please consult your tax adviser before taking any withdrawal.
We will make systematic withdrawal payments to you or your designated payee. We
reserve the right to modify or suspend the Systematic Withdrawal Program. If we
modify or suspend the Systematic Withdrawal Program, existing systematic
withdrawal payments will not be affected.
MINIMUM CONTRACT VALUE
Your Contract will terminate if you withdraw all of your Contract Value. We
will, however, ask you to confirm your withdrawal request before terminating
your Contract. If we terminate your Contract, we will distribute to you its
Contract Value, less any applicable charges and taxes.
<PAGE>
INCOME PAYMENTS
PAYOUT START DATE
The Payout Start Date is the day that we apply your money to an Income Plan. The
Payout Start Date must be:
o at least one month after the Issue Date; and
o no later than the Annuitant's 90th birthday.
You may change the Payout Start Date at any time by notifying us in writing of
the change at least 30 days before the scheduled Payout Start Date. Absent a
change, we will use the Payout Start Date stated in your Contract.
INCOME PLANS
An "Income Plan" is a series of payments on a scheduled basis to you or to
another person designated by you. You may choose and change your choice of
Income Plan until 30 days before the Payout Start Date. If you do not select an
Income Plan, we will make income payments in accordance with Income Plan 1 with
guaranteed payments for 10 years. After the Payout Start Date, you may not make
withdrawals (except as described below) or change your choice of Income Plan.
Three Income Plans are available under the Contract. Each is available to
provide:
o fixed income payments;
o variable income payments; or
o a combination of the two.
The three Income Plans are:
Income Plan 1 -- Life Income with Guaranteed Payments. Under this
plan, we make periodic income payments for at least as long as the
Annuitant lives. If the Annuitant dies before we have made all of the
guaranteed income payments, we will continue to pay the remainder of
the guaranteed income payments as required by the Contract.
Income Plan 2 -- Joint and Survivor Life Income with Guaranteed
Payments. Under this plan, we make periodic income payments for at
least as long as either the Annuitant or the joint Annuitant is
alive. If both the Annuitant and the joint Annuitant die before we
have made all of the guaranteed income payments, we will continue to
pay the remainder of the guaranteed income payments as required by
the Contract.
Income Plan 3 -- Guaranteed Payments for a Specified Period (5 Years
to 30 Years). Under this plan, we make periodic income payments for
the period you have chosen. These payments do not depend on the
Annuitant's life. We will deduct the mortality and expense risk
charge from the assets of the Variable Sub-Accounts that support the
variable income payments even though we may not bear any mortality
risk.
The length of any guaranteed payment period under your selected Income Plan
generally will affect the dollar amounts of each income payment. As a general
rule, longer guarantee periods result in lower income payments, all other things
being equal. For example, if you choose an Income Plan with payments that depend
on the life of the Annuitant but with no minimum specified period for guaranteed
payments, the income payments generally will be greater than the income payments
made under the same Income Plan with a minimum specified period for guaranteed
payments.
If you choose Income Plan 1 or 2, or, if available, another Income Plan with
payments that continue for the life of the Annuitant or joint Annuitant, we may
require proof of age and sex of the Annuitant or joint Annuitant before starting
income payments, and proof that the Annuitant or joint Annuitants is alive
before we make each payment. Please note that under such Income Plans, if you
elect to take no minimum guaranteed payments, it is possible that the payee
could receive only 1 income payment if the Annuitant and any joint Annuitant
both die before the second income payment, or only 2 income payments if they die
before the third income payment, and so on.
Generally, you may not make withdrawals after the Payout Start Date. One
exception to this rule applies if you are receiving variable income payments
that do not depend on the life of the Annuitant (such as under Income Plan 3).
In that case you may terminate all or part of the Variable Account portion of
the income payments at any time and receive a lump sum equal to the present
value of the remaining variable income payments associated with the amount
withdrawn. To determine the present value of any remaining variable income
payments being withdrawn, we use a discount rate equal to the assumed annual
investment rate that we use to compute such variable income payments. The
minimum amount you may withdraw under this feature is $1,000. We deduct
applicable premium taxes from the Contract Value at the Payout Start Date.
We may make other Income Plans available. You may obtain information about them
by writing or calling us.
You must apply at least the Contract Value in the Fixed Account Options on the
Payout Start Date to fixed income payments. If you wish to apply any portion of
your Fixed Account Option balance to provide variable income payments, you
should plan ahead and transfer that amount to the Variable Sub-Accounts prior to
the Payout Start Date. If you do not tell us how to allocate your Contract Value
among fixed and variable income payments, we will apply your Contract Value in
the Variable Account to variable income payments and your Contract Value in the
Fixed Account Options to fixed income payments.
We will apply your Contract Value, less applicable taxes to your Income Plan on
the Payout Start Date. If the Contract owner has not made any purchase payments
for at least 3 years preceding the Payout Start Date, and either the Contract
Value is less than $2,000 or not enough to provide an initial payment of at
least $20, and state law permits, we may:
o terminate the Contract and pay you the Contract Value, less any applicable
taxes, in a lump sum instead of the periodic payments you have chosen, or
o reduce the frequency of your payments so that each payment will be at least
$20.
VARIABLE INCOME PAYMENTS
The amount of your variable income payments depends upon the investment results
of the Variable Sub-Accounts you select, any premium taxes due, the age and sex
of the Annuitant, and the Income Plan you choose. We guarantee that the payments
will not be affected by (a) actual mortality experience and (b) the amount of
our administration expenses.
We cannot predict the total amount of your variable income payments. Your
variable income payments may be more or less than your total purchase payments
because (a) variable income payments vary with the investment results of the
underlying Portfolio and (b) the Annuitant could live longer or shorter than we
expect based on the tables we use.
In calculating the amount of the periodic payments in the annuity tables in the
Contract, we assumed an annual investment rate of 3%. If the actual net
investment return of the Variable Sub-Accounts you choose is less than this
assumed investment rate, then the dollar amount of your variable income payments
will decrease. The dollar amount of your variable income payments will increase,
however, if the actual net investment return exceeds the assumed investment
rate. The dollar amount of the variable income payments stays level if the net
investment return equals the assumed investment rate. Please refer to the
Statement of Additional Information for more detailed information as to how we
determine variable income payments.
FIXED INCOME PAYMENTS
We guarantee income payment amounts derived from any Fixed Account Option for
the duration of the Income Plan. We calculate the fixed income payments by:
1) deducting any applicable premium tax; and
2) applying the resulting amount to the greater of (a) the appropriate
value from the income payment table in your Contract or (b) such other
value as we are offering at that time.
We may defer making fixed income payments for a period of up to 6 months or such
shorter time as state law may require. If we defer payments for 10 days or more,
we will pay interest as required by law from the date we receive the withdrawal
request to the date we make payment.
CERTAIN EMPLOYEE BENEFIT PLANS
The Contracts offered by this prospectus contain income payment tables that
provide for different payments to men and women of the same age. However, we
reserve the right to use income payment tables that do not distinguish on the
basis of sex to the extent permitted by law. In certain employment-related
situations, employers are required by law to use the same income payment tables
for men and women. Accordingly, if the Contract is to be used in connection with
an employment-related retirement or benefit plan, you should consult with legal
counsel as to whether the purchase of a Contract is appropriate. For qualified
plans, where it is appropriate, we may use income payment tables that do not
distinguish on the basis of sex.
<PAGE>
DEATH BENEFITS
We will pay a death benefit if, prior to the Payout Start Date:
1) any Contract owner dies or,
2) the Annuitant dies, if the Contract owner is not a natural person.
We will pay the death benefit to the new Contract owner as determined
immediately after the death. The new Contract owner would be a surviving
Contract owner(s) or, if none, the Beneficiary(ies). In the case of the death of
an Annuitant, we will pay the death benefit to the current Contract owner.
A request for payment of the death benefit must include "Due Proof of Death" and
such other documentation as we may require. We will accept the following
documentation as Due Proof of Death:
o a certified copy of a death certificate,
o a certified copy of a decree of a court of competent jurisdiction as to the
finding of death, or
o any other proof acceptable to us.
We will determine the value of the death benefit at the end of the Valuation
Date on which we receive a complete request or payment of the death benefit. If
we receive a request after 4:00 p.m. Eastern Time on a Valuation Date, we will
process the request as of the end of the following Valuation Date.
DEATH BENEFIT AMOUNT
Prior to the Payout Start Date, the death benefit is equal to the greatest of:
1) the Contract Value as of the date we determine the death benefit, or
2) the sum of all purchase payments less any prior withdrawals.
ENHANCED DEATH BENEFIT OPTION
The Enhanced Death Benefit Option is an optional benefit that you may select
when you purchase the Contract. This option is only available if the oldest
Contract owner is between the ages of 0 and 75 on the Issue Date. If the
Contract owner is a living individual, the enhanced death benefit applies only
for the death of the Contract owner. If the Contract owner is not a living
individual, the enhanced death benefit applies only for the death of the
Annuitant. For Contracts with the Enhanced Death Benefit Option, the death
benefit will be the greatest of (1) or (2) above, or (3) the enhanced death
benefit.
Enhanced Death Benefit. The enhanced death benefit on the Issue Date is equal to
the initial purchase payment. On each Contract Anniversary, we will recalculate
your enhanced death benefit to equal the greater of your Contract Value on that
date, or the most recently calculated enhanced death benefit. We also will
recalculate your enhanced death benefit whenever you make an additional purchase
payment or a partial withdrawal. Additional purchase payments will increase the
enhanced death benefit dollar-for-dollar. Withdrawals will reduce the enhanced
death benefit dollar-for-dollar. In the absence of any withdrawals or purchase
payments, the enhanced death benefit will be the greatest of all Contract
Anniversary Contract Values on or before the date we calculate the death
benefit.
We will calculate Anniversary Values for each Contract Anniversary prior to the
oldest Contract owner's or the Annuitant's, if the Contract owner is not a
natural person, 80th birthday. After age 80, we will recalculate the enhanced
death benefit only for purchase payments and withdrawals. The enhanced death
benefit will never be greater than the maximum death benefit allowed by any
non-forfeiture laws which govern the Contract.
DEATH BENEFIT PAYMENTS
If the Contract owner eligible to receive the death benefit is not a natural
person, the Contract owner may elect to receive the distribution upon death in
one or more distributions.
If the Contract owner is a natural person, the Contract owner may elect to
receive the death benefit either in one or more distributions, or by periodic
payments through an Income Plan. Payments from the Income Plan must begin within
one year of the date of death and must be payable throughout:
o the life of the Contract owner; or
o a period not to exceed the life expectancy of the Contract owner; or
o the life of the Contract owner with payments guaranteed for a period not to
exceed the life expectancy of the Contract owner.
In any event, the entire value of the Contract must be distributed within 5
years after the date of death unless an Income Plan is elected or a surviving
spouse continues the Contract in accordance with the provisions described below.
If the surviving spouse of the deceased Contract owner is the new Contract
owner, then the spouse may elect one of the options listed above or may continue
the Contract in the Accumulation Phase as if the death had not occurred. The
Contract may only be continued once. On the day the Contract is continued, the
Contract Value will be the death benefit calculated as of the date on which we
receive all the information we need to process your spouse's request to continue
the Contract after your death.
<PAGE>
MORE INFORMATION
ALLSTATE NEW YORK
Allstate New York is the issuer of the Contract. Allstate New York is a stock
life insurance company organized under the laws of the State of New York.
Allstate New York was incorporated in 1967 and was known as "Financial Life
Insurance Company" from 1967 to 1978. From 1978 to 1984, Allstate New York was
known as "PM Life Insurance Company." Since 1984 the company has been known as
"Allstate Life Insurance Company of New York."
Allstate New York is currently licensed to operate in New York. Our home office
is located at One Allstate Drive, Farmingville, New York 11738. Our customer
service center is located at 3100 Sanders Road, Suite M4A, Northbrook, Illinois
60062 (mailing address: P.O. Box 94038, Palatine, Illinois 60094).
Allstate New York is a wholly owned subsidiary of Allstate Life Insurance
Company ("Allstate Life"), a stock life insurance company incorporated under the
laws of the State of Illinois. Allstate Life is a wholly owned subsidiary of
Allstate Insurance Company, a stock property-liability insurance company
incorporated under the laws of Illinois. With the exception of the directors
qualifying shares, all of the outstanding capital stock of Allstate Insurance
Company is owned by The Allstate Corporation.
Several independent rating agencies regularly evaluate life insurers'
claims-paying ability, quality of investments, and overall stability. A.M. Best
Company assigns Allstate New York the financial performance rating of A+(g).
Standard & Poor's Insurance Rating Services assigns an AA+ (Very Strong)
financial strength rating and Moody's assigns an Aa2 (Excellent) financial
strength rating to Allstate New York. These ratings do not reflect the
investment performance of the Variable Account. We may from time to time
advertise these ratings in our sales literature.
THE VARIABLE ACCOUNT
Allstate New York established the Allstate Life of New York Separate Account A
on December 15, 1995. We have registered the Variable Account with the SEC as a
unit investment trust. The SEC does not supervise the management of the Variable
Account or Allstate New York.
We own the assets of the Variable Account. The Variable Account is a segregated
asset account under New York law. That means we account for the Variable
Account's income, gains and losses separately from the results of our other
operations. It also means that only the assets of the Variable Account that are
in excess of the reserves and other Contract liabilities with respect to the
Variable Account are subject to liabilities relating to our other operations.
Our obligations arising under the Contracts are general corporate obligations of
Allstate New York.
The Variable Account consists of multiple Variable Sub-Accounts, 9 of which are
available through the Contracts. Each Variable Sub-Account invests in a
corresponding Portfolio. We may add new Variable Sub-Accounts or eliminate one
or more of them, if we believe marketing, tax, or investment conditions so
warrant. We do not guarantee the investment performance of the Variable Account,
its Sub-Accounts or the Portfolios. We may use the Variable Account to fund our
other annuity contracts. We will account separately for each type of annuity
contract funded by the Variable Account.
<PAGE>
THE PORTFOLIOS
Dividends and Capital Gain Distributions. We automatically reinvest all
dividends and capital gains distributions from the Portfolios in shares of the
distributing Portfolio at their net asset value.
Voting Privileges. As a general matter, you do not have a direct right to vote
the shares of the Portfolios held by the Variable Sub-Accounts to which you have
allocated your Contract Value. Under current law, however, you are entitled to
give us instructions on how to vote those shares on certain matters. Based on
our present view of the law, we will vote the shares of the Portfolios that we
hold directly or indirectly through the Variable Account in accordance with
instructions that we receive from Contract owners entitled to give such
instructions.
As a general rule, before the Payout Start Date, the Contract owner or anyone
with a voting interest is the person entitled to give voting instructions. The
number of shares that a person has a right to instruct will be determined by
dividing the Contract Value allocated to the applicable Variable Sub-Account by
the net asset value per share of the corresponding Portfolio as of the record
date of the meeting. After the Payout Start Date, the person receiving income
payments has the voting interest. The payee's number of votes will be determined
by dividing the reserve for such Contract allocated to the applicable Variable
Sub-Account by the net asset value per share of the corresponding Portfolio. The
votes decrease as income payments are made and as the reserves for the Contract
decrease.
We will vote shares attributable to Contracts for which we have not received
instructions, as well as shares attributable to us, in the same proportion as we
vote shares for which we have received instructions, unless we determine that we
may vote such shares at our own discretion. We will apply voting instructions to
abstain on any item to be voted on a pro-rata basis to reduce the votes eligible
to be cast.
We reserve the right to vote Portfolio shares as we see fit without regard to
voting instructions to the extent permitted by law. If we disregard voting
instructions, we will include a summary of that action and our reasons for that
action in the next semi-annual financial report we send to you.
Changes in Portfolios. If the shares of any of the Portfolios are no longer
available for investment by the Variable Account or if, in our judgment, further
investment in such shares is no longer desirable in view of the purposes of the
Contract, we may eliminate that Portfolio and substitute shares of another
eligible investment fund. Any substitution of securities will comply with the
requirements of the 1940 Act. We also may add new Variable Sub-Accounts that
invest in additional mutual funds. We will notify you in advance of any changes.
Conflicts of Interest. Certain of the Portfolios sell their shares to Variable
Accounts underlying both variable life insurance and variable annuity contracts.
It is conceivable that in the future it may be unfavorable for variable life
insurance Variable Accounts and variable annuity Variable Accounts to invest in
the same Portfolio. The boards of directors of these Portfolios monitor for
possible conflicts among Variable Accounts buying shares of the Portfolios.
Conflicts could develop for a variety of reasons. For example, differences in
treatment under tax and other laws or the failure by a Variable Account to
comply with such laws could cause a conflict. To eliminate a conflict, a
Portfolio's board of directors may require a Variable Account to withdraw its
participation in a Portfolio. A Portfolio's net asset value could decrease if it
had to sell investment securities to pay redemption proceeds to a Variable
Account withdrawing because of a conflict.
THE CONTRACT
Distribution. ALFS, Inc.* ("ALFS"), located at 3100 Sanders Road, Northbrook,
Illinois 60062, serves as principal underwriter of the Contracts. ALFS is a
wholly owned subsidiary of Allstate Life Insurance Company. ALFS is a registered
broker-dealer under the Securities and Exchange Act of 1934, as amended
("Exchange Act"), and is a member of the National Association of Securities
Dealers, Inc. ("NASD").
ALFS has contracted with Scudder Investors Services, Inc. ("Scudder") for
Scudder's services in connection with the distribution of the Contract. Scudder
is registered with the SEC as a broker-dealer under the 1934 Act and is a member
of the NASD. Individuals directly involved in the sale of the Contract are
registered representatives of Scudder and appointed licensed agents of the
Allstate New York. The principal address of Scudder is Two International Place,
Boston, Massachusetts 02110-4103.
The underwriting agreement with ALFS provides for indemnification of ALFS by
Allstate New York for liability to Contract owners arising out of services
rendered or Contracts issued.
Administration. We have primary responsibility for all administration of the
Contracts and the Variable Account. We provide the following administrative
services, among others:
o issuance of the Contracts;
o maintenance of Contract owner records;
o Contract owner services;
o calculation of unit values;
o maintenance of the Variable Account; and
o preparation of Contract owner reports.
We will send you Contract statements and transaction confirmations at least
annually. The annual statement details values and specific Contract data for
each particular Contract. You should notify us promptly in writing of any
address change. You should read your statements and confirmations carefully and
verify their accuracy. You should contact us promptly if you have a question
about a periodic statement. We will investigate all complaints and make any
necessary adjustments retroactively, but you must notify us of a potential error
within a reasonable time after the date of the questioned statement. If you wait
too long, we will make the adjustment as of the date that we receive notice of
the potential error.
We also will provide you with additional periodic and other reports, information
and prospectuses as may be required by federal securities laws.
* Effective May 1, 2000, Allstate Life Financial Services, Inc. was renamed
ALFS, Inc.
QUALIFIED PLANS
If you use the Contract with a qualified plan, the plan may impose different or
additional conditions or limitations on withdrawals, death benefits, Payout
Start Dates, income payments, and other Contract features. In addition, adverse
tax consequences may result if qualified plan limits on distributions and other
conditions are not met. Please consult your qualified plan administrator for
more information.
LEGAL MATTERS
Freedman, Levy, Kroll & Simonds, Washington, D.C., has advised Allstate New York
on certain federal securities law matters. All matters of New York law
pertaining to the Contracts, including the validity of the Contracts and
Allstate New York's right to issue such Contracts under New York insurance law,
have been passed upon by Michael J. Velotta, General Counsel of Allstate New
York.
YEAR 2000
Allstate New York is heavily dependent upon complex computer systems for all
phases of its operations, including customer service and policy and contract
administration. Since many of Allstate New York's older computer software
programs recognize only the last two digits of the year in any date, some
software may have failed to operate properly in or after the year 1999, if the
software was not reprogrammed or replaced ("Year 2000 Issue"). Allstate New York
believes that many of its counterparties and suppliers also had potential Year
2000 Issues that could affect Allstate New York. In 1995, Allstate Insurance
Company commenced a four-phase plan intended to mitigate and/or prevent the
adverse effects of Year 2000 Issues. These strategies included normal
development and enhancement of new and existing systems, upgrades to operating
systems already covered by maintenance agreements, and modifications to existing
systems to make them Year 2000 compliant. The plan also included Allstate New
York actively working with its major external counterparties and suppliers to
assess their compliance efforts and Allstate New York's exposure to them.
Because of the accuracy of this plan, and its timely completion, Allstate New
York has experienced no material impacts on its results of operations, liquidity
or financial position due to the Year 2000 issue. Year 2000 costs are expensed
as incurred.
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TAXES
The following discussion is general and is not intended as tax advice. Allstate
New York makes no guarantee regarding the tax treatment of any Contract or
transaction involving a Contract.
Federal, state, local and other tax consequences of ownership or receipt of
distributions under an annuity contract depend on your individual circumstances.
If you are concerned about any tax consequences with regard to your individual
circumstances, you should consult a competent tax adviser.
TAXATION OF ANNUITIES IN GENERAL
Tax Deferral. Generally, you are not taxed on increases in the Contract Value
until a distribution occurs. This rule applies only where:
1) the Contract owner is a natural person,
2) the investments of the Variable Account are "adequately diversified"
according to Treasury Department regulations, and
3) Allstate New York is considered the owner of the Variable Account
assets for federal income tax purposes.
Non-natural Owners. As a general rule, annuity contracts owned by non-natural
persons such as corporations, trusts, or other entities are not treated as
annuity contracts for federal income tax purposes. The income on such contracts
is taxed as ordinary income received or accrued by the owner during the taxable
year. Please see the Statement of Additional Information for a discussion of
several exceptions to the general rule for Contracts owned by non-natural
persons.
Diversification Requirements. For a Contract to be treated as an annuity for
federal income tax purposes, the investments in the Variable Account must be
"adequately diversified" consistent with standards under Treasury Department
regulations. If the investments in the Variable Account are not adequately
diversified, the contract will not be treated as an annuity contract for federal
income tax purposes. As a result, the income on the Contract will be taxed as
ordinary income received or accrued by the owner during the taxable year.
Although Allstate New York does not have control over the Portfolios or their
investments, we expect the Portfolios to meet the diversification requirements.
Ownership Treatment. The IRS has stated that you will be considered the owner of
Variable Account assets if you possess incidents of ownership in those assets,
such as the ability to exercise investment control over the assets. At the time
the diversification regulations were issued, the Treasury Department announced
that the regulations do not provide guidance concerning circumstances in which
investor control of the Variable Account investments may cause an investor to be
treated as the owner of the Variable Account. The Treasury Department also
stated that future guidance would be issued regarding the extent that owners
could direct sub-account investments without being treated as owners of the
underlying assets of the Variable Account.
Your rights under the Contract are different than those described by the IRS in
rulings in which it found that contract owners were not owners of Variable
Account assets. For example, you have the choice to allocate premiums and
Contract Values among more investment alternatives. Also, you may be able to
transfer among investment alternatives more frequently than in such rulings.
These differences could result in you being treated as the owner of the Variable
Account. If this occurs, income and gain from the Variable Account assets would
be includible in your gross income. Allstate New York does not know what
standards will be set forth in any regulations or rulings which the Treasury
Department may issue. It is possible that future standards announced by the
Treasury Department could adversely affect the tax treatment of your Contract.
We reserve the right to modify the Contract as necessary to attempt to prevent
you from being considered the federal tax owner of the assets of the Variable
Account. However, we make no guarantee that such modification to the Contract
will be successful.
Taxation of Partial and Full Withdrawals. If you make a partial withdrawal under
a non-Qualified Contract, amounts received are taxable to the extent the
Contract Value exceeds the investment in the Contract. The investment in the
Contract is the gross premium paid for the Contract minus any amounts previously
received from the Contract if such amounts were properly excluded from your
gross income. If you make a partial withdrawal under a Qualified Contract, the
portion of the payment that bears the same ratio to the total payment that the
investment in the Contract (i.e., nondeductible IRA contributions, after tax
contributions to qualified plans) bears to the contract value, is excluded from
your income. If you make a full withdrawal under a non-Qualified Contract or a
Qualified Contract, the amount received will be taxable only to the extent it
exceeds the investment in the contract.
"Nonqualified distributions" from Roth IRAs are treated as made from
contributions first and are included in gross income only to the extent that
distributions exceed contributions. "Qualified distributions" from Roth IRAs are
not included in gross income. "Qualified distributions" are any distributions
made more than 5 taxable years after the taxable year of the first contribution
to any Roth IRA and which are:
o made on or after the date the individual attains age 59 1/2,
o made to a beneficiary after the Contract owner's death,
o attributable to the Contract owner being disabled, or
o for a first time home purchase (first time home purchases are subject
to a lifetime limit of $10,000).
If you transfer a non-Qualified Contract without full and adequate consideration
to a person other than your spouse (or to a former spouse incident to a
divorce), you will be taxed on the difference between the Contract Value and the
investment in the Contract at the time of transfer. Except for certain Qualified
Contracts, any amount you receive as a loan under a Contract, and any assignment
or pledge (or agreement to assign or pledge) of the Contract Value is treated as
a withdrawal of such amount or portion.
Taxation of Annuity Payments. Generally, the rule for income taxation of annuity
payments received from a non-Qualified Contract provides for the return of your
investment in the Contract in equal tax-free amounts over the payment period.
The balance of each payment received is taxable. For fixed annuity payments, the
amount excluded from income is determined by multiplying the payment by the
ratio of the investment in the Contract (adjusted for any refund feature or
period certain) to the total expected value of annuity payments for the term of
the contract. If you elect variable annuity payments, the amount excluded from
taxable income is determined by dividing the investment in the Contract by the
total number of expected payments. The annuity payments will be fully taxable
after the total amount of the investment in the Contract is excluded using these
ratios. If you die, and annuity payments cease before the total amount of the
investment in the Contract is recovered, the unrecovered amount will be allowed
as a deduction for your last taxable year.
Taxation of Annuity Death Benefits. Death of a Contract owner, or death of the
Annuitant if the Contract is owned by a non-natural person, will cause a
distribution of death benefits from a Contract. Generally, such amounts are
included in income as follows:
1) if distributed in a lump sum, the amounts are taxed in the same manner
as a full withdrawal; or
2) if distributed under an annuity option, the amounts are taxed in the
same manner as an annuity payment. Please see the Statement of
Additional Information for more detail on distribution at death
requirements.
Penalty Tax on Premature Distributions. A 10% penalty tax applies to the taxable
amount of any premature distribution from a non-Qualified Contract. The penalty
tax generally applies to any distribution made prior to the date you attain age
59 1/2. However, no penalty tax is incurred on distributions:
1) made on or after the date the Contract owner attains age 59 1/2;
2) made as a result of the Contract owner's death or disability;
3) made in substantially equal periodic payments over the owner's life or
life expectancy,
4) made under an immediate annuity; or
5) attributable to investment in the contract before August 14, 1982.
You should consult a competent tax adviser to determine if any other exceptions
to the penalty apply to your situation. Similar exceptions may apply to
distributions from Qualified Contracts.
Aggregation of Annuity Contracts. All non-qualified deferred annuity contracts
issued by Allstate New York (or its affiliates) to the same Contract owner
during any calendar year will be aggregated and treated as one annuity contract
for purposes of determining the taxable amount of a distribution.
TAX QUALIFIED CONTRACTS
Contracts may be used as investments with certain qualified plans such as:
o Individual Retirement Annuities or Accounts (IRAs) under Section 408 of
the Code;
o Roth IRAs under Section 408A of the Code;
o Simplified Employee Pension Plans under Section 408(k) of the Code;
o Savings Incentive Match Plans for Employees (SIMPLE) Plans under
Section 408(p) of the Code;
o Tax Sheltered Annuities under Section 403(b) of the Code;
o Corporate and Self Employed Pension and Profit Sharing Plans; and
o State and Local Government and Tax-Exempt Organization Deferred
Compensation Plans.
The income on qualified plan and IRA investments is tax deferred and variable
annuities held by such plans do not receive any additional tax deferral. You
should review the annuity features, including all benefits and expenses, prior
to purchasing a variable annuity in a qualified plan or IRA. Allstate New York
reserves the right to limit the availability of the Contract for use with any of
the qualified plans listed above. In the case of certain qualified plans, the
terms of the plans may govern the right to benefits, regardless of the terms of
the Contract.
Restrictions Under Section 403(b) Plans. Section 403(b) of the Tax Code provides
tax-deferred retirement savings plans for employees of certain non-profit and
educational organizations. Under Section 403(b), any Contract used for a 403(b)
plan must provide that distributions attributable to salary reduction
contributions made after December 31, 1988, and all earnings on salary reduction
contributions, may be made only:
1) on or after the date the employee
o attains age 59 1/2,
o separates from service,
o dies,
o becomes disabled, or
2) on account of hardship (earnings on salary reduction contributions
may not be distributed on the account of hardship).
These limitations do not apply to withdrawals where Allstate New York is
directed to transfer some or all of the Contract Value to another 403(b) plan.
INCOME TAX WITHHOLDING
Allstate New York is required to withhold federal income tax at a rate of 20% on
all "eligible rollover distributions" unless you elect to make a "direct
rollover" of such amounts to an IRA or eligible retirement plan. Eligible
rollover distributions generally include all distributions from Qualified
Contracts, excluding IRAs, with the exception of:
1) required minimum distributions, or
2) a series of substantially equal periodic payments made over a period
of at least 10 years, or over the life (joint lives) of the
participant (and beneficiary).
Allstate New York may be required to withhold federal and state income taxes on
any distributions from non-Qualified Contracts or Qualified Contracts that are
not eligible rollover distributions, unless you notify us of your election to
not have taxes withheld.
<PAGE>
PERFORMANCE INFORMATION
We may advertise the performance of the Variable Sub-Accounts, including yield
and total return information. Yield refers to the income generated by an
investment in a Variable Sub-Account over a specified period. Total return
represents the change, over a specified period of time, in the value of an
investment in a Variable Sub-Account after reinvesting all income distributions.
All performance advertisements will include, as applicable, standardized yield
and total return figures that reflect the deduction of insurance charges.
Performance advertisements also may include aggregate, average, year-by-year, or
other types of total return figures.
Performance information for periods prior to the inception date of the Variable
Sub-Accounts will be based on the historical performance of the corresponding
Portfolios for the periods beginning with the inception dates of the Portfolios
and adjusted to reflect current Contract expenses. You should not interpret
these figures to reflect actual historical performance of the Variable Account.
We may include in advertising and sales materials tax deferred compounding
charts and other hypothetical illustrations that compare currently taxable and
tax deferred investment programs based on selected tax brackets. Our
advertisements also may compare the performance of our Variable Sub-Accounts
with: (a) certain unmanaged market indices, including but not limited to the Dow
Jones Industrial Average, the Standard & Poor's 500, and the Shearson Lehman
Bond Index; and/or (b) other management investment companies with investment
objectives similar to the underlying portfolios being compared. In addition, our
advertisements may include the performance ranking assigned by various
publications, including the Wall Street Journal, Forbes, Fortune, Money,
Barron's, Business Week, USA Today, and statistical services, including Lipper
Analytical Services Mutual Fund Survey, Lipper Annuity and Closed End Survey,
the Variable Annuity Research Data Survey, and SEI.
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
<S> <C>
Description Page
Additions, Deletions or Substitutions of Investments 3
Reinvestment 3
The Contract 4
Purchase of Contracts 4
Performance Data 4
Money Market Sub-Account Yields 4
Other Sub-Account Yields 5
Standardized Total Returns 5
Other Performance Data 6
Cumulative Total Returns 6
Adjusted Historical Total Returns 6
Tax-Free Exchanges (1035 Exchanges, Rollovers and Transfers) 7
Premium Taxes 7
Tax Reserves 7
Income Payments 7
Calculation of Variable Annuity Unit Values 7
General Matters 8
Incontestability 8
Settlements 8
Safekeeping of the Variable Account's Assets 8
Federal Tax Matters 8
Introduction 8
Taxation of Allstate New York 8
Exceptions to the Non-Natural Owner Rule 8
IRS Required Distribution at Death Rules 8
Qualified Plans 9
Types of Qualified Plans 9
Experts 10
Financial Statements 10
</TABLE>
This prospectus does not constitute an offering in any jurisdiction in which
such offering may not lawfully be made. We do not authorize anyone to provide
any information or representations regarding the offering described in this
prospectus other than as contained in this prospectus.
<PAGE>
Statement of Additional Information
For the
Scudder Horizon Advantage Variable Annuity
Group Flexible Premium Deferred Variable Annuity Contracts
Issued Through
Allstate Life of New York Separate Account A
Offered by
Allstate Life Insurance Company of New York
One Allstate Drive
Farmingville, New York 11738
1-800-833-0194
This Statement of Additional Information expands upon subjects discussed in the
current prospectus for the Scudder Horizon Advantage, a flexible premium
deferred variable annuity (the "Contract") offered by Allstate Life Insurance
Company of New York ("Allstate New York", "Company", "we", "us"). We are a
wholly owned subsidiary of Allstate Life Insurance Company.
Except as otherwise noted, this Statement of Additional Information uses the
same defined terms as in the prospectus. You may obtain a copy of the prospectus
dated May __, 2000, by calling 1-800-833-0194 (Scudder Direct) or 1-800-875-9040
(AARP Investment Program Members) or writing to us at our customer service
center (P.O. Box 94038, Palatine, IL 60094-4038).
This Statement of Additional Information is not a prospectus and should be read
only in conjunction with the prospectus for the Contract.
Dated May __, 2000
<PAGE>
<TABLE>
<CAPTION>
Statement of Additional Information Table of Contents
<S> <C>
Description Page
Additions, Deletions or Substitutions of Investments 3
Reinvestment 3
The Contract 4
Purchase of Contracts 4
Performance Data 4
Money Market Sub-Account Yields 4
Other Sub-Account Yields 5
Standardized Total Returns 5
Other Performance Data 6
Cumulative Total Returns 6
Adjusted Historical Total Returns 6
Tax-Free Exchanges (1035 Exchanges, Rollovers and Transfers) 7
Premium Taxes 7
Tax Reserves 7
Income Payments 7
Calculation of Variable Annuity Unit Values 7
General Matters 8
Incontestability 8
Settlements 8
Safekeeping of the Variable Account's Assets 8
Federal Tax Matters 8
Introduction 8
Taxation of Allstate New York 8
Exceptions to the Non-Natural Owner Rule 8
IRS Required Distribution at Death Rules 8
Qualified Plans 9
Types of Qualified Plans 9
Experts 10
Financial Statements 10
</TABLE>
<PAGE>
ADDITIONS, DELETIONS OR SUBSTITUTIONS OF INVESTMENTS
We retain the right, subject to any applicable law, to make additions to,
deletions from or substitutions for the Portfolios shares held by any Variable
Sub-Account ("Sub-Account"). We also reserve the right to eliminate the shares
of any of the Funds and to substitute shares of another portfolio of the
Portfolios, or of another open-end, registered investment company, if the shares
of the Portfolio are no longer available for investment, or if, in our judgment,
investment in any Portfolio would become inappropriate in view of the purposes
of the Variable Account.
Substitutions of shares in a Sub-Account will not be made until you have been
notified of the change, and until the Securities and Exchange Commission has
approved the change, to the extent such notification and approval are required
by the Investment Company Act of 1940 (the "Act"). Nothing contained in this
Statement of Additional Information shall prevent the Variable Account from
purchasing other securities for other series or classes of contracts, or from
effecting a conversion between series or classes of contracts on the basis of
requests made by Contract owners.
We may also establish additional Sub-Accounts of the Variable Account. Each
additional Sub-Account would purchase shares in a new portfolio of the Fund or
in another mutual fund. New Sub-Accounts may be established when, in our sole
discretion, marketing needs or investment conditions warrant. Any new
Sub-Accounts offered in conjunction with the Contract will be made available to
existing Contract owners as determined by Allstate New York. We may also
eliminate one or more Sub-Accounts if, in our sole discretion, marketing, tax or
investment conditions so warrant.
In the event of any such substitution or change, we may, by appropriate
endorsement, make such changes in the Contract as may be necessary or
appropriate to reflect such substitution or change. If deemed to be in the best
interests of persons having voting rights under the policies, the Variable
Account may be operated as a management company under the Act or it may be
deregistered under the Act in the event registration is no longer required.
REINVESTMENT
All dividends and capital gains distributions from the Portfolios are
automatically reinvested in shares of the distributing Portfolio at its net
asset value.
<PAGE>
THE CONTRACT
Purchase of Contracts
We offer the Contracts to the public through brokers licensed under the federal
securities laws and state insurance laws. The Contracts are distributed through
the principal underwriter for the Variable Account, ALFS, Inc.,* an affiliate of
Allstate Life Insurance Company of New York. The offering of the Contracts is
continuous and we do not anticipate discontinuing the offering of the Contracts.
However, we reserve the right to discontinue the offering of the Contracts.
* Effective May 1, 2000, Allstate Life Financial Services, Inc. was renamed
ALFS, Inc.
PERFORMANCE DATA
From time to time the Variable Account may publish advertisements containing
performance data relating to its sub-accounts. The performance data for the
Sub-Accounts (other than for the Scudder Money Market Sub-Account) will always
be accompanied by total return quotations. Performance figures used by the
Variable Account are based on actual historical performance of its Sub-Accounts
for specific periods, and the figures are not intended to indicate future
performance.
Money Market Sub-Account Yields
The Current Yield is computed by determining the net change (exclusive of
realized gains and losses on the sale of securities and unrealized appreciation
and depreciation) at the end of the seven-day period in the value of a
hypothetical account under a Contract having a balance of 1 unit of the Money
Market Sub-Account at the beginning of the period, dividing such net change in
account value by the value of the account at the beginning of the period to
determine the base period return, and annualizing this quotient on a 365-day
basis. The net change in account value reflects (i) net income from the
Portfolio attributable to the hypothetical account and (ii) charges and
deductions imposed under the Contract that are attributable to the hypothetical
account. The charges and deductions include the per unit charges for the
hypothetical account for the mortality and expense risk charge (0.40% for
Contracts with the standard death benefit and 0.50% for Contracts with the
Enhanced Death Benefit) and an administrative expense charge of 0.30%.
Current Yield is calculated according to the following formula:
Current Yield = ((NCS - ES) / W) x (365 / 7)
We may also disclose the Effective Yield of the Money Market Sub-Account for the
same seven-day period, determined on a compounded basis. The seven-day Effective
Yield is calculated by compounding the unannualized base period return according
to the following formula:
Effective Yield = (1 + ((NCS - ES)/UV))(365 / 7) -1
Where, for both formulas:
NCS = The net change in the value of the Portfolio (exclusive of
realized gains and losses on the sale of securities and unrealized
appreciation and depreciation and exclusive of income other than
investment income) for the seven-day period attributable to a
hypothetical account having a balance of one Sub-Account unit under a
Contract.
ES = Per unit expenses of the Sub-Account for the Contracts for the
seven-day period.
UV = The unit value for a Contract on the first day of the seven day
period.
The Current and Effective Yield on amounts held in the Money Market Sub-Account
normally will fluctuate on a daily basis. Therefore, the disclosed yield for any
given past period is not an indication or representation of future yields or
rates of return. The Money Market Sub-Account's actual yield is affected by
changes in interest rates on money market securities, average Portfolio
maturity, the types and quality of Portfolio securities held, and the operating
expenses.
<PAGE>
Other Sub-Account Yields
The 30-Day Yield refers to income generated by the Bond Sub-Account over a
specific 30-day period. Because the yield is annualized, the yield generated
during the 30-day period is assumed to be generated each 30-day period over a
12-month period. The yield is computed by: (i) dividing the net investment
income of the Portfolio attributable to the Sub-Account units less Sub-Account
expenses attributable to the Contracts for the period, by (ii) the maximum
offering price per unit on the last day of the period times the daily average
number of units outstanding for the period, by (iii) compounding that yield for
a 6-month period, and by (iv) multiplying that result by 2. Expenses
attributable to the Bond Sub-Account for the Contracts include the mortality and
expense risk charge (0.40% for Contracts with the standard death benefit and
0.50% for Contracts with the Enhanced Death Benefit) and an administrative
expense charge of 0.30%.
The 30-Day Yield is calculated according to the following formula:
30-Day Yield = 2 x ((((NI -ES) / (U x UV)) + 1)(to the power of 6)- 1)
Where:
NI = Net income of the Portfolio for the 30-day period attributable to the
Sub-Account's units.
ES = Expenses of the Sub-Account for the Contracts for the 30-day period.
U = The average daily number of units outstanding attributable to the Contracts.
UV = The unit value for a Contract at the close (highest) of the last day in the
30-day period.
The 30-Day Yield on amounts held in the Bond Sub-Account normally will fluctuate
over time. Therefore, the disclosed yield for any given past period is not an
indication or representation of future yields or rates of return. The Bond
Sub-Account's actual yield is affected by the types and quality of Portfolio
securities held by the Portfolio, and its operating expenses.
STANDARDIZED TOTAL RETURNS
We may disclose standardized total returns for one or more of the Sub-Accounts
for 1, 5 and 10 years, and for a period from the date of commencement of the
Sub-Accounts' operations if shorter than any of the foregoing. Standardized
total returns for other periods of time may, from time to time, also be
disclosed.
Standardized total returns for a Contract represent the average annual
compounded rates of return that would equate a single investment of $1,000 to
the redemption value of that investment as of the last day of each of the
periods. The ending date for each period for which Total Return quotations are
provided will be for the most recent month end practicable, considering the type
and media of the communication, and will be stated in the communication.
Standardized total returns will be calculated using Sub-Account Accumulation
Unit Values which Allstate New York calculates on each Valuation Date based on
the performance of the Sub-Account's underlying Portfolio, and are reduced by
all fees and charges under the Contract, including the mortality and expense
risk charge (0.40% for Contracts with the standard death benefit and 0.50% for
Contracts with the Enhanced Death Benefit) and an administrative expense charge
of 0.30%.
We use the following formula for calculating standardized total return:
TR = (ERV / P)(to the power of 1/N) - 1
Where:
TR = The average annual total return net of Sub-Account recurring charges for
the Contracts.
ERV = The ending redeemable value of the hypothetical account at the end of the
period.
P = A hypothetical single payment of $1,000.
N = The number of years in the period.
No standardized total returns are shown for the Variable Sub-Accounts as they
had not commenced operations prior to the date of this Statement Additional
Information.
OTHER PERFORMANCE DATA
Cumulative Total Returns
We may disclose cumulative total returns of the Sub-Accounts in conjunction with
the standard format described above. The cumulative total returns will be
calculated using the following formula:
CTR = (ERV / P) - 1
Where:
CTR = The cumulative total return net of Sub-Account recurring charges for the
period.
ERV = The ending redeemable value of the hypothetical investment at the end of
the period.
P = A hypothetical single payment of $1,000.
No cumulative total returns are shown for the Variable Sub-Accounts as they had
not commenced operations prior to the date of this Statement Additional
Information.
Adjusted Historical Total Returns
We may also disclose yield and total return, including periods before the date
that the Variable Sub-Accounts commenced operations. For periods prior to the
date the Variable Sub-Accounts commenced operations, "adjusted historical total
returns" will be calculated based on the performance of the underlying
Portfolios adjusted to reflect some or all of the charges equal to those
currently assessed against the Sub-Accounts under the Contract.
The adjusted historical total returns for the Variable Sub-Accounts for the
periods ended December 31, 1999 are set out below. The average annual total
returns for the Portfolios were reduced by all fees and charges under the
Contract, including the mortality and expense risk charge (0.40% for Contracts
without the Enhanced Death Benefit and 0.50% for Contracts with the Enhanced
Death Benefit) and an administrative expense charge of 0.30%. Adjusted
historical total returns are not shown for the Money Market Portfolio.
<TABLE>
<CAPTION>
WITHOUT THE ENHANCED DEATH BENEFIT
Ten Years or Portfolio
Since Inception Inception
Variable Sub-Account One Year Five Years of Portfolio Date
<S> <C> <C> <C> <C>
Balanced 14.51% 19.28% 12.57% 7/16/86
Bond -1.64% 6.20% 6.62% 7/16/86
Capital Growth 34.29% 27.80% 17.20% 7/16/86
Global Discovery 64.73% N/A 24.49% 5/1/96
Growth and Income 5.34% 18.12% 16.72% 5/2/94
International 53.43% 19.83% 12.43% 5/1/87
Large Company Growth N/A N/A 57.94%* 5/3/99
21st Century Growth N/A N/A 134.42%* 5/3/99
WITH THE ENHANCED DEATH BENEFIT
Ten Years or Portfolio
Since Inception Inception
Variable Sub-Account One Year Five Years of Portfolio Date
Balanced 14.40% 19.16% 12.46% 7/16/86
Bond -1.74% 6.09% 6.51% 7/16/86
Capital Growth 34.15% 27.67% 17.08% 7/16/86
Global Discovery 64.56% N/A 24.36% 5/1/96
Growth and Income 5.23% 18.00% 16.60% 5/2/94
International 53.28% 19.71% 12.32% 5/1/87
Large Company Growth N/A N/A 57.78%* 5/3/99
21st Century Growth N/A N/A 134.18%* 5/3/99
</TABLE>
* Adjusted historical total returns shown for the Large Company Growth and 21st
Century Growth Variable Sub-Accounts are annualized.
The Variable Account may also advertise the performance of the Sub-Accounts
relative to certain performance rankings and indices compiled by independent
organizations, such as: (a) Lipper Analytical Services, Inc.; (b) the Standard &
Poor's 500 Composite Stock Price Index ("S & P 500"); (c) A.M. Best Company; (d)
Bank Rate Monitor; and (e) Morningstar.
TAX-FREE EXCHANGES (1035 EXCHANGES, ROLLOVERS AND TRANSFERS)
We accept purchase payments that are the proceeds of a contract in a transaction
qualifying for a tax-free exchange under Section 1035 of the Internal Revenue
Code. Except as required by federal law in calculating the basis of the
contract, we do not differentiate between Section 1035 purchase payments and
non-Section 1035 purchase payments.
We also accept "rollovers" and transfers from contracts qualifying as
tax-sheltered annuities ("TSAs"), individual retirement annuities or accounts
("IRAs"), or any other Qualified Contract that is eligible to "rollover" into an
IRA. We differentiate among Non-Qualified Contracts, TSAs, IRAs and other
Qualified Contracts to the extent necessary to comply with federal tax laws. For
example, we restrict the assignment, transfer or pledge of TSAs and IRAs so the
contracts will continue to qualify for special tax treatment. If contemplating
any such exchange, rollover or transfer of a contract you should contact a
competent tax adviser with respect to the potential effects of such a
transaction.
PREMIUM TAXES
Applicable premium tax rates depend on the Contract owner's state of residency
and the insurance laws and our status in those states where premium taxes are
incurred. Premium tax rates may be changed by legislation, administrative
interpretations, or judicial acts. Currently, we do not make deductions for
premium taxes under the Contract because New York does not charge premium taxes
on annuities. We may deduct taxes that may be imposed in the future from
purchase payments or the Contract Value when the tax is incurred or at a later
time.
TAX RESERVES
We do not establish capital gains tax reserves for the Sub-Accounts or deduct
charges for tax reserves because we believe that capital gains attributable to
the Variable Account will not be taxable. However, we reserve the right to
deduct charges to establish tax reserves for potential taxes on realized or
unrealized capital gains.
INCOME PAYMENTS
Calculation of Variable Annuity Unit Values
We calculate the amount of the first income payment by applying your Contract
Value allocated to each Sub-Account less any applicable premium tax charge
deducted at this time, to the income payment tables in the Contract. The first
Variable Annuity Income Payment is divided by the Sub-Account's then current
annuity unit value to determine the number of annuity units upon which later
income payments will be based. Unless transfers are made among Sub-Accounts,
each variable income payment after the first will be equal to the sum of the
number of annuity units determined in this manner for each Sub-Account times the
then current annuity unit value for each respective Sub-Account.
Annuity units in each Sub-Account are valued separately and annuity unit values
will depend upon the investment experience of the particular underlying
Portfolio in which the Sub-Account invests. The value of the annuity unit for
each Sub-Account at the end of any Valuation Period is calculated by: (a)
multiplying the annuity unit value at the end of the immediately preceding
Valuation Period by the Sub-Account's Net Investment Factor during the period;
and then (b) dividing the product by the sum of 1.0 plus the assumed investment
rate for the period. The assumed investment rate adjusts for the interest rate
assumed in the Income Payment tables used to determine the dollar amount of the
first variable annuity Income Payment, and is at an effective annual rate which
is disclosed in the Contract.
We determine the amount of the first Income Payment paid under an income plan
using the interest rate and mortality table disclosed in the Contract. Due to
judicial or legislative developments regarding the use of tables that do not
differentiate on the basis of sex, different annuity tables may be used.
GENERAL MATTERS
Incontestability
We will not contest the Contract after it is issued.
Settlements
Due proof of your death (or Annuitant's death if there is a non-natural owner)
must be received prior to settlement of a death claim.
Safekeeping of the Variable Account's Assets
We hold title to the assets of the Variable Account. The assets are kept
physically segregated and held separate and apart from our general corporate
assets. Records are maintained of all purchases and redemptions of the Portfolio
shares held by each of the Sub-Accounts.
The Fund does not issue certificates and, therefore, we hold the Variable
Account's assets in open account in lieu of stock certificates. See the Fund's
prospectus for a more complete description of the custodian of the Fund.
FEDERAL TAX MATTERS
Introduction
The following discussion is general and is not intended as tax advice. Allstate
New York makes no guarantee regarding the tax treatment of any contract or
transaction involving a contract. Federal, state, local and other tax
consequences of ownership or receipt of distributions under an annuity contract
depend on the individual circumstances of each person. If you are concerned
about any tax consequences with regard to your individual circumstances, you
should consult a competent tax adviser.
Taxation of Allstate New York
We are taxed as a life insurance company under Part I of Subchapter L of the
Internal Revenue Code. The Variable Account is not an entity separate from the
Company, and its operations form a part of the Company. As a consequence, the
Variable Account will not be taxed separately as a "Regulated Investment
Company" under Subchapter M of the Code. Investment income and realized capital
gains of the Variable Account are automatically applied to increase reserves
under the contract. Under existing federal income tax law, Allstate New York
believes that the Variable Account investment income and capital gains will not
be taxed to the extent that such income and gains are applied to increase the
reserves under the Contract. Generally, reserves are amounts that Allstate New
York is legally required to accumulate and maintain in order to meet future
obligations under the Contracts. Allstate New York does not anticipate that it
will incur any federal income tax liability attributable to the Variable
Account. Therefore we do not intend to make provisions for any such taxes. If we
are taxed on investment income or capital gains of the Variable Account, then we
may impose a charge against the Variable Account in order to make provision for
such taxes.
Exceptions to the Non-Natural Owner Rule
Generally, Contracts held by a non-natural owner are not treated as annuity
contracts for federal income tax purposes, unless one of several exceptions
apply. Contracts will generally be treated as held by a natural person if the
nominal owner is a trust or other entity that holds the Contract for the benefit
of a natural person. However, this special exception will not apply in the case
of an employer who is the nominal owner of a Contract under a non-qualified
deferred compensation arrangement for employees. Other exceptions to the
non-natural owner rule are: (1) Contracts acquired by an estate of a decedent by
reason of the death of the decedent; (2) certain qualified Contracts; (3)
Contracts purchased by employers upon the termination of certain qualified
plans; (4) certain Contracts used in connection with structured settlement
agreements, and (5) Contracts purchased with a single premium when the annuity
starting date is no later than a year from purchase of the annuity and
substantially equal periodic payments are made, not less frequently than
annually, during the annuity period.
IRS Required Distribution at Death Rules
To qualify as an annuity contract for federal income tax purposes, a nonqualifed
Contract must provide: (1) if any owner dies on or after the annuity start date
but before the entire interest in the contract has been distributed, the
remaining portion of such interest must be distributed at least as rapidly as
under the method of distribution being used as of the date of your death; (2) if
any owner dies prior to the annuity start date, the entire interest in the
contract will be distributed within five years after the date of your death.
The five year requirement is satisfied if:
(1) any portion of the owner's interest which is payable to a designated
beneficiary is distributed over the life of such beneficiary (or over a period
not extending beyond the life expectancy of the beneficiary), and
(2) the distributions begin within one year of the owner's death.
If the owner's designated beneficiary is the owner's surviving spouse, the
Contract may be continued with the surviving spouse as the new owner. If the
owner of the Contract is a non-natural person, the annuitant is treated as the
owner for purposes of applying the distribution at death rules. In addition, a
change in the annuitant on a Contract owned by a non-natural person will be
treated as the death of the owner.
Qualified Plans
This annuity contract may be used with several types of Qualified Plans. The
income on qualified plans and IRA investments is tax deferred and variable
annuities held by such plans do not receive any additional tax deferral. You
should review the annuity features, including all benefits and expenses, prior
to purchasing a variable annuity in a qualified plan or IRA. Allstate New York
reserves the right to limit the availability of the Contract for use with any of
the qualified plans listed below. The tax rules applicable to participants in
such Qualified Plans vary according to the type of Plan and the terms and
conditions of the Plan. Qualified Plan participants, and owners, annuitants and
beneficiaries under the Contract may be subject to the terms and conditions of
the plan regardless of the terms of the Contract.
Types of Qualified Plans
IRAs
Section 408 of the Code permits eligible individuals to contribute to an
individual retirement program known as an IRA. IRAs are subject to limitations
on the amount that can be contributed and on the time when distributions may
commence. Certain distributions from other types of qualified plans may be
"rolled over" on a tax-deferred basis into an IRA. An IRA generally may not
provide life insurance, but it may provide a Death Benefit that equals the
greater of the premiums paid or the Contract Value. The Contract provides a
Death Benefit that in certain circumstances may exceed the greater of the
payments or the Contract Value. If the IRS treats the Death Benefit as violating
the prohibition on investment in life insurance contracts, the Contract would
not qualify as an IRA.
Roth IRAs
Section 408A of the Code permits eligible individuals to make nondeductible
contributions to an individual retirement program known as a Roth IRA. Roth IRAs
are subject to limitations on the amount that can be contributed. In certain
instances, distributions from Roth IRAs are excluded from gross income. Subject
to certain limits, a traditional Individual Retirement Account or Annuity may be
converted or "rolled over" to a Roth IRA. The taxable portion of a conversion or
rollover distribution is included in gross income, but is exempted from the 10%
penalty tax on premature distributions.
Simplified Employee Pension Plans
Section 408(k) of the Code allows employers to establish simplified employee
pension plans for their employees using the employees' IRAs if certain criteria
are met. Under these plans the employer may, within limits, make deductible
contributions on behalf of the employees to their individual retirement
annuities. Employers intending to use the Contract in connection with such plans
should seek competent advice.
Savings Incentive Match Plans for Employees (SIMPLE Plans)
Sections 408(p) and 401(k) of the Tax Code allow employers with 100 or fewer
employees to establish SIMPLE retirement plans for their employees. SIMPLE plans
may be structured as a SIMPLE retirement account using an employee's IRA to hold
the assets, or as a Section 401(k) qualified cash or deferred arrangement. In
general, a SIMPLE plan consists of a salary deferral program for eligible
employees and matching or non-elective contributions made by employers.
Employers intending to use the Contract in conjunction with SIMPLE plans should
seek competent tax and legal advice.
Tax Sheltered Annuities
Section 403(b) of the Tax Code permits public school employees and employees of
certain types of tax-exempt organizations (specified in Section 501(c)(3) of the
Code) to have their employers purchase Contracts for them. Subject to certain
limitations, a Section 403(b) plan allows an employer to exclude the purchase
payments from the employees' gross income. A Contract used for a Section 403(b)
plan must provide that distributions attributable to salary reduction
contributions made after 12/31/88, and all earnings on salary reduction
contributions, may be made only on or after:
o the date the employee attains age 59 1/2,
o separates from service,
o dies,
o becomes disabled, or
o on the account of hardship (earnings on salary reduction contributions
may not be distributed for hardship).
These limitations do not apply to withdrawals where Allstate New York is
directed to transfer some or all of the Contract Value to another 403(b) plan.
Corporate and Self-Employed Pension and Profit Sharing Plans
Sections 401(a) and 403(a) of the Tax Code permit corporate employers to
establish various types of tax favored retirement plans for employees. The Tax
Code permits self-employed individuals to establish tax favored retirement plans
for themselves and their employees. Such retirement plans may permit the
purchase of Contracts in order to provide benefits under the plans.
State and Local Government and Tax-Exempt Organization
Deferred Compensation Plans
Section 457 of the Tax Code permits employees of state and local governments and
tax-exempt organizations to defer a portion of their compensation without paying
current taxes. The employees must be participants in an eligible deferred
compensation plan. Employees with Contracts under the plan are considered
general creditors of the employer. The employer, as owner of the Contract, has
the sole right to the proceeds of the Contract. Generally, under the non-natural
owner rules, such Contracts are not treated as annuity contracts for federal
income tax purposes. Under these plans, contributions made for the benefit of
the employees will not be included in the employees' gross income until
distributed from the plan. However, all the compensation deferred under a 457
plan must remain the sole property of the employer. As property of the employer,
the assets of the plan are subject to the claims of the employer's general
creditors, until such time as the assets are made available to the employee or a
beneficiary.
EXPERTS
The financial statements of Allstate New York as of December 31, 1999 and 1998
and for each of the three years in the period ended December 31, 1999, and
related financial statement schedules that appear in this Statement of
Additional Information have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report appearing herein, and are included in
reliance upon the report of such firm given upon their authority as experts in
accounting and auditing.
The financial statements of the Variable Account as of December 31, 1999 and for
each of the periods in the two years then ended that appear in this Statement of
Additional Information have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report appearing herein, and are included in
reliance upon the report of such firm given upon their authority as experts in
accounting and auditing.
FINANCIAL STATEMENTS
The financial statements of the Variable Account as of December 31, 1999 and for
each of the periods in the two years then ended, the financial statements of
Allstate New York as of December 31, 1999 and 1998 and for each of the three
years in the period ended December 31, 1999 and related financial statement
schedules and the accompanying Independent Auditors' Reports appear in the pages
that follow. The financial statements and schedules of Allstate New York
included herein should be considered only as bearing upon the ability of
Allstate New York to meet its obligations under the Contracts.
<PAGE>
INDEPENDENT AUDITORS' REPORT
TO THE BOARD OF DIRECTORS AND SHAREHOLDER OF
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK:
We have audited the accompanying Statements of Financial Position of Allstate
Life Insurance Company of New York (the "Company", an affiliate of The Allstate
Corporation) as of December 31, 1999 and 1998, and the related Statements of
Operations and Comprehensive Income, Shareholder's Equity and Cash Flows for
each of the three years in the period ended December 31, 1999. Our audits also
included Schedule IV - Reinsurance and Schedule V - Valuation and Qualifying
Accounts. These financial statements and financial statement schedules are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and financial statement schedules based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Company as of December 31, 1999 and
1998, and the results of its operations and its cash flows for each of the three
years in the period ended December 31, 1999 in conformity with generally
accepted accounting principles. Also, in our opinion, Schedule IV - Reinsurance,
and Schedule V - Valuation and Qualifying Accounts, when considered in relation
to the basic financial statements taken as a whole, present fairly, in all
material respects, the information set forth therein.
/s/ Deloitte & Touche LLP
Chicago, Illinois
February 25, 2000
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF FINANCIAL POSITION
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------------------
1999 1998
------------------ -------------------
<S> <C> <C>
($ in thousands, except par value data)
ASSETS
Investments
Fixed income securities, at fair value
(amortized cost $1,858,216 and $1,648,972) $ 1,912,545 $ 1,966,067
Mortgage loans 166,997 145,095
Short-term 46,037 76,127
Policy loans 31,109 29,620
----------------- ------------------
Total investments 2,156,688 2,216,909
Cash 1,135 3,117
Deferred policy acquisition costs 106,932 87,830
Accrued investment income 25,712 22,685
Reinsurance recoverables 1,949 2,210
Other assets 7,803 9,887
Separate Accounts 443,705 366,247
----------------- ------------------
TOTAL ASSETS $ 2,743,924 $ 2,708,885
================= ==================
LIABILITIES
Reserve for life-contingent contract benefits $ 1,098,016 $ 1,208,104
Contractholder funds 839,157 703,264
Current income taxes payable 10,132 14,029
Deferred income taxes 3,077 25,449
Other liabilities and accrued expenses 41,218 23,463
Payable to affiliates, net 4,731 38,835
Separate Accounts 443,705 366,247
----------------- ------------------
TOTAL LIABILITIES 2,440,036 2,379,391
----------------- ------------------
COMMITMENTS AND CONTINGENT LIABILITIES (NOTE 13)
SHAREHOLDER'S EQUITY
Common stock, $25 par value, 100,000 and 80,000
shares authorized, issued and outstanding 2,500 2,000
Additional capital paid-in 45,787 45,787
Retained income 225,367 198,801
Accumulated other comprehensive income:
Unrealized net capital gains 30,234 82,906
----------------- ------------------
TOTAL ACCUMULATED OTHER COMPREHENSIVE INCOME 30,234 82,906
----------------- ------------------
TOTAL SHAREHOLDER'S EQUITY 303,888 329,494
----------------- ------------------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $ 2,743,924 $ 2,708,885
================= ==================
</TABLE>
See notes to financial statements.
2
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------
($ in thousands) 1999 1998 1997
------------------ ------------------ ------------------
<S> <C> <C> <C>
REVENUES
Premiums (net of reinsurance ceded
of $4,253, $3,204 and $3,087 ) $ 63,748 $ 85,771 $ 90,366
Contract charges 38,626 33,281 28,597
Net investment income 148,331 134,413 124,887
Realized capital gains and losses (2,096) 4,697 701
--------- --------- --------
248,609 258,162 244,551
--------- --------- --------
COSTS AND EXPENSES
Contract benefits (net of reinsurance recoveries
of $1,166, $997 and $1,985 ) 178,267 183,839 179,872
Amortization of deferred policy acquisition costs 8,985 7,029 5,023
Operating costs and expenses 20,151 24,703 23,644
--------- --------- --------
207,403 215,571 208,539
--------- --------- --------
INCOME FROM OPERATIONS
BEFORE INCOME TAX EXPENSE 41,206 42,591 36,012
Income tax expense 14,640 14,934 13,296
--------- --------- --------
NET INCOME 26,566 27,657 22,716
--------- --------- --------
OTHER COMPREHENSIVE (LOSS) INCOME, AFTER TAX
Change in unrealized net capital gains and losses (52,672) 18,427 27,627
--------- -------- --------
COMPREHENSIVE (LOSS) INCOME $ (26,106) $ 46,084 $ 50,343
========= ======== ========
</TABLE>
See notes to financial statements.
3
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF SHAREHOLDER'S EQUITY
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------------------------------
1999 1998 1997
------------------ ------------------- -----------------
($ in thousands)
COMMON STOCK
<S> <C> <C> <C>
Balance, beginning of year $ 2,000 $ 2,000 $ 2,000
Issuance of new shares of stock 500 - -
----------------- ----------------- -----------------
Balance, end of year 2,500 2,000 2,000
----------------- ----------------- -----------------
ADDITIONAL CAPITAL PAID-IN $ 45,787 $ 45,787 $ 45,787
----------------- ----------------- -----------------
RETAINED INCOME
Balance, beginning of year $ 198,801 $ 171,144 $ 148,428
Net income 26,566 27,657 22,716
----------------- ----------------- -----------------
Balance, end of year 225,367 198,801 171,144
----------------- ----------------- -----------------
ACCUMULATED OTHER COMPREHENSIVE INCOME
Balance, beginning of year $ 82,906 $ 64,479 $ 36,852
Change in unrealized net capital gains
and losses (52,672) 18,427 27,627
----------------- ----------------- -----------------
Balance, end of year 30,234 82,906 64,479
----------------- ----------------- -----------------
TOTAL SHAREHOLDER'S EQUITY $ 303,888 $ 329,494 $ 283,410
================= ================= =================
</TABLE>
See notes to financial statements.
4
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------
($ in thousands) 1999 1998 1997
------------------ ------------------- -----------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 26,566 $ 27,657 $ 22,716
Adjustments to reconcile net income to net cash
provided by operating activities
Amortization and other non-cash items (37,619) (34,890) (31,112)
Realized capital gains and losses 2,096 (4,697) (701)
Interest credited to contractholder funds 36,736 41,200 31,667
Changes in:
Life-contingent contract benefits and
contractholder funds 38,527 53,343 68,114
Deferred policy acquisition costs (17,262) (16,693) (10,781)
Income taxes payable 2,094 13,865 (158)
Other operating assets and liabilities 13,049 (15,974) 8,545
----------------- ----------------- -----------------
Net cash provided by operating activities 64,187 63,811 88,290
----------------- ----------------- -----------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales of fixed income securities 161,443 65,281 15,723
Investment collections
Fixed income securities 21,822 159,648 120,061
Mortgage loans 7,479 5,855 5,365
Investments purchases
Fixed income securities (383,961) (292,444) (236,984)
Mortgage loans (31,888) (24,252) (35,200)
Change in short-term investments, net 29,493 (55,846) 16,342
Change in policy loans, net (1,489) (2,020) (2,241)
----------------- ----------------- -----------------
Net cash used in investing activities (197,101) (143,778) (116,934)
----------------- ----------------- -----------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock 500 - -
Contractholder fund deposits 197,439 137,473 79,384
Contractholder fund withdrawals (67,007) (54,782) (51,374)
----------------- ----------------- -----------------
Net cash provided by financing activities 130,932 82,691 28,010
----------------- ----------------- -----------------
NET (DECREASE) INCREASE IN CASH (1,982) 2,724 (634)
CASH AT THE BEGINNING OF YEAR 3,117 393 1,027
----------------- ----------------- -----------------
CASH AT END OF YEAR $ 1,135 $ 3,117 $ 393
================= ================= =================
</TABLE>
See notes to financial statements.
5
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
1. GENERAL
BASIS OF PRESENTATION
The accompanying financial statements include the accounts of Allstate Life
Insurance Company of New York (the "Company"), a wholly owned subsidiary of
Allstate Life Insurance Company ("ALIC"), which is wholly owned by Allstate
Insurance Company ("AIC"), a wholly owned subsidiary of The Allstate Corporation
(the "Corporation"). These financial statements have been prepared in conformity
with generally accepted accounting principles.
To conform with the 1999 presentation, certain amounts in the prior years'
financial statements and notes have been reclassified.
NATURE OF OPERATIONS
The Company markets a broad line of life insurance and savings products in the
state of New York through a combination of exclusive agencies, securities firms,
banks, specialized brokers and through direct response marketing. Life insurance
consists of traditional products, including term and whole life,
interest-sensitive life and immediate annuities with life contingencies. Savings
products include deferred annuities and immediate annuities without life
contingencies. Deferred annuities include fixed rate, market value adjusted and
variable annuities. Group pension savings products include immediate annuities
also referred to as retirement annuities. In 1999, annuity premiums and deposits
represented 76.2% of the Company's total statutory premiums and deposits.
The Company monitors economic and regulatory developments which have the
potential to impact its business. Recently enacted federal legislation will
allow for banks and other financial organizations to have greater participation
in the securities and insurance businesses. This legislation may present an
increased level of competition for sales of the Company's products. Furthermore,
the market for deferred annuities and interest-sensitive life insurance is
enhanced by the tax incentives available under current law. Any legislative
changes which lessen these incentives are likely to negatively impact the demand
for these products.
Additionally, traditional demutualizations of mutual insurance companies and
enacted and pending state legislation to permit mutual insurance companies to
convert to a hybrid structure known as a mutual holding company could have a
number of significant effects on the Company by (1) increasing industry
competition through consolidation caused by mergers and acquisitions related to
the new corporate form of business; and (2) increasing competition in capital
markets.
Although the Company currently benefits from agreements with financial services
entities who market and distribute its products, change in control of these
non-affliliated entities with which the Company has alliances could negatively
impact the Company's sales.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENTS
Fixed income securities include bonds and mortgage-backed and asset-backed
securities. All fixed income securities are carried at fair value and may be
sold prior to their contractual maturity ("available for sale"). The difference
between amortized cost and fair value, net of deferred income taxes, certain
deferred policy acquisition costs, and certain reserves for life-contingent
contract benefits, is reflected as a component of shareholder's equity.
Provisions are recognized for declines in the value of fixed income securities
that are other than temporary. Such writedowns are included in realized capital
gains and losses.
6
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
Mortgage loans are carried at outstanding principal balance, net of unamortized
premium or discount and valuation allowances. Valuation allowances are
established for impaired loans when it is probable that contractual principal
and interest will not be collected. Valuation allowances for impaired loans
reduce the carrying value to the fair value of the collateral or the present
value of the loan's expected future repayment cash flows discounted at the
loan's original effective interest rate. Valuation allowances on loans not
considered to be impaired are established based on consideration of the
underlying collateral, borrower financial strength, current and expected market
conditions, and other factors.
Short-term investments are carried at cost or amortized cost which approximates
fair value, and includes collateral received in connection with securities
lending activities. Policy loans are carried at the unpaid principal balances.
Investment income consists primarily of interest and short-term investment
dividends. Interest is recognized on an accrual basis and dividends are recorded
at the ex-dividend date. Interest income on mortgage-backed and asset-backed
securities is determined on the effective yield method, based on estimated
principal repayments. Accrual of income is suspended for fixed income securities
and mortgage loans that are in default or when the receipt of interest payments
is in doubt. Realized capital gains and losses are determined on a specific
identification basis.
DERIVATIVE FINANCIAL INSTRUMENTS
The Company utilizes financial futures contracts which are derivative financial
instruments. By meeting specific criteria these futures are designated as
accounting hedges and accounted for on a deferral basis. In order to qualify as
accounting hedges, financial futures contracts must reduce the primary market
risk exposure on an enterprise or transaction basis in conjunction with a hedge
strategy; be designated as a hedge at the inception of the transaction; and be
highly correlated with the fair value of, or interest income or expense
associated with, the hedged item at inception and throughout the hedge period.
Derivatives that are not designated as accounting hedges are accounted for on a
fair value basis.
If, subsequent to entering into a hedge transaction, the financial futures
contract becomes ineffective (including if the occurrence of a hedged
anticipatory transaction is no longer probable), the Company terminates the
derivative position. Gains and losses on these terminations are reported in
realized capital gains and losses in the period they occur. The Company may also
terminate derivatives as a result of other events or circumstances. Gains and
losses on these terminations are deferred and amortized over the remaining life
of the hedged item.
The Company accounts for financial futures as hedges using deferral accounting
for anticipatory investment purchases and sales when the criteria for futures
(discussed above) are met. In addition, anticipated transactions must be
probable of occurrence and their significant terms and characteristics
identified. Under deferral accounting, gains and losses on financial futures
contracts are deferred as other liabilities and accrued expenses. Once the
anticipated transaction occurs, the deferred gains and losses are considered
part of the cost basis of the asset and reported net of tax in shareholder's
equity. The gains and losses deferred are then recognized in conjunction with
the earnings on the hedged item. Fees and commissions paid on these derivatives
are also deferred as an adjustment to the carrying value of the hedged item.
RECOGNITION OF INSURANCE REVENUE AND RELATED BENEFITS AND INTEREST CREDITED
Traditional life insurance products consist principally of products with fixed
and guaranteed premiums and benefits, primarily term and whole life insurance
products and certain annuities with life contingencies. Premiums from these
products are recognized as revenue when due. Benefits are recognized in relation
to
7
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
such revenue so as to result in the recognition of profits over the life of
the policy and are reflected in contract benefits.
Interest-sensitive life contracts are insurance contracts whose terms are not
fixed and guaranteed. The terms that may be changed include premiums paid by the
contractholder, interest credited to the contractholder account balance and one
or more amounts assessed against the contractholder. Premiums from these
contracts are reported as deposits to the contractholder funds. Contract charge
revenue consists of fees assessed against the contractholder account balance for
cost of insurance (mortality risk), contract administration and surrender
charges. Contract benefits include interest credited to contracts and claims
incurred in excess of the related contractholder account balance.
Limited payment contracts, a type of life-contingent immediate annuity or
traditional life product, are contracts that provide insurance protection over a
contract period that extends beyond the period in which premiums are collected.
Gross premiums in excess of the net premium on limited payment contracts are
deferred and recognized over the contract period. Contract benefits are
recognized in relation to such revenue so as to result in the recognition of
profits over the life of the policy.
Contracts that do not subject the Company to significant risks arising from
mortality or morbidity are referred to as investment contracts. Fixed rate
annuities, market value adjusted annuities and immediate annuities without life
contingencies are considered investment contracts. Deposits received for such
contracts are reported as deposits to contractholder funds. Contract charge
revenue for investment contracts consists of charges assessed against the
contractholder account balance for contract administration and surrenders.
Contract benefits include interest credited and claims incurred in excess of the
related contractholder account balance.
Crediting rates for fixed rate annuities and interest-sensitive life contracts
are adjusted periodically by the Company to reflect current market conditions.
Investment contracts also include variable annuity contracts which are sold as
Separate Accounts products. The assets supporting these products are legally
segregated and available only to settle Separate Accounts contract obligations.
Deposits received are reported as Separate Accounts liabilities. The Company's
contract charge revenue for these contracts consists of charges assessed against
the Separate Accounts fund balances for contract maintenance, administration,
mortality, expense and surrenders.
DEFERRED POLICY ACQUISITION COSTS
Certain costs which vary with and are primarily related to acquiring life and
savings business, principally agents and brokers remuneration, premium taxes,
certain underwriting costs and direct mail solicitation expenses, are deferred
and amortized into income. Deferred policy acquisition costs are periodically
reviewed as to recoverability and written down where necessary.
For traditional life insurance and limited payment contracts, these costs are
amortized in proportion to the estimated revenue on such business. Assumptions
relating to estimated revenue, as well as to all other aspects of the deferred
acquisition costs and reserve calculations, are determined based upon conditions
as of the date of the policy issue and are generally not revised during the life
of the policy. Any deviations from projected business inforce, resulting from
actual policy terminations differing from expected levels, and any estimated
premium deficiencies change the rate of amortization in the period such events
occur. Generally, the amortization period for these contracts approximates the
estimated lives of the policies.
For interest-sensitive life and investment contracts, the costs are amortized in
proportion to the estimated gross profits on such business over the estimated
lives of the contract periods. Gross profits are determined
8
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
at the date of policy issue and comprise estimated investment, mortality,
expense margins and surrender charges. Assumptions underlying the gross profits
are periodically updated to reflect actual experience, and changes in the amount
or timing of estimated gross profits will result in adjustments to the
cumulative amortization of these costs.
The present value of future profits inherent in acquired blocks of insurance is
classified as a component of deferred policy acquisition costs. The present
value of future profits is amortized over the life of the blocks of insurance
using current crediting rates.
To the extent unrealized gains or losses on securities carried at fair value
would result in an adjustment of estimated gross profits had those gains or
losses actually been realized, the related carrying value of deferred
acquisition costs, including present value of future profits, are adjusted
together with accumulated unrealized net capital gains included in shareholder's
equity.
REINSURANCE RECOVERABLE
In the normal course of business, the Company seeks to limit aggregate and
single exposure to losses on large risks by purchasing reinsurance from other
insurers. Reinsurance recoverables are estimated based upon assumptions
consistent with those used in establishing the underlying reinsured contacts.
Insurance liabilities are reported gross of reinsurance recoverables.
Reinsurance does not extinguish the Company's primary liability under the
policies written and therefore reinsurers and amounts recoverable therefrom are
regularly evaluated by the Company and allowances for uncollectible reinsurance
are established as appropriate.
INCOME TAXES
The income tax provision is calculated under the liability method. Deferred tax
assets and liabilities are recorded based on the difference between the
financial statement and tax bases of assets and liabilities at the enacted tax
rates. The principal assets and liabilities giving rise to such differences are
insurance reserves and deferred policy acquisition costs. Deferred income taxes
also arise from unrealized capital gains and losses on fixed income securities
carried at fair value.
SEPARATE ACCOUNTS
The Company issues deferred variable annuity contracts, the assets and
liabilities of which are legally segregated and recorded as assets and
liabilities of the Separate Accounts. Absent any contract provisions wherein the
Company contractually guarantees either a minimum return or account value to the
beneficiaries of the contractholders in the form of a death benefit, the
contractholders bear the investment risk that the Separate Accounts' funds may
not meet their stated investment objectives.
The assets of the Separate Accounts are carried at fair value. Separate Accounts
liabilities represent the contractholders' claims to the related assets and are
carried at the fair value of the assets. In the event that the asset value of
certain contractholder accounts are projected to be below the value guaranteed
by the Company, a liability is established through a charge to earnings.
Investment income and realized capital gains and losses of the Separate Accounts
accrue directly to the contractholders and therefore, are not included in the
Company's statements of operations and comprehensive income. Revenues to the
Company from the Separate Accounts consist of contract maintenance and
administration fees, and mortality, surrender and expense charges.
RESERVES FOR LIFE-CONTINGENT CONTRACT BENEFITS
The reserve for life-contingent contract benefits, which relates to traditional
life insurance, group retirement annuities, immediate annuities with life
contingencies and certain variable annuity guarantees, is computed on the basis
of assumptions as to mortality, future investment yields, terminations and
9
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
expenses at the time the policy is issued. These assumptions, which for
traditional life insurance are applied using the net level premium method,
include provisions for adverse deviation and generally vary by such
characteristics as type of coverage, year of issue and policy duration. Detailed
reserve assumptions and reserve interest rates are outlined in Note 7. To the
extent that unrealized gains on fixed income securities would result in a
premium deficiency had those gains actually been realized, the related increase
in reserves is recorded as a reduction of the unrealized gains included in
shareholder's equity.
CONTRACTHOLDER FUNDS
Contractholder funds arise from the issuance of interest-sensitive life and
certain investment contracts. Deposits received are recorded as interest-bearing
liabilities. Contractholder funds are equal to deposits received, net of
commissions, and interest credited to the benefit of the contractholder less
withdrawals, mortality charges and administrative expenses. Detailed information
on crediting rates and surrender and withdrawal protection on contractholder
funds are outlined in Note 7.
OFF-BALANCE-SHEET FINANCIAL INSTRUMENTS
Commitments to extend mortgage loans have only off-balance-sheet risk because
their contractual amounts are not recorded in the Company's statements of
financial position. The contractual amounts and fair values of these instruments
are presented in Note 5.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
NEW ACCOUNTING STANDARDS
In 1999, the Company adopted Statement of Position ("SOP") 97-3, "Accounting by
Insurance and Other Enterprises for Insurance-Related Assessments." The SOP
provides guidance concerning when to recognize a liability for insurance-related
assessments and how those liabilities should be measured. Specifically,
insurance-related assessments should be recognized as liabilities when all of
the following criteria have been met: 1) an assessment has been imposed or it is
probable that an assessment will be imposed, 2) the event obligating an entity
to pay an assessment has occurred and 3) the amount of the assessment can be
reasonably estimated. Adoption of this statement was not material to the
Company's results of operations or financial position.
PENDING ACCOUNTING STANDARDS
In June 1999, the Financial Accounting Standards Board delayed the effective
date of Statement of Financial Accounting Standards ("SFAS") No. 133,
"Accounting for Derivative Instruments and Hedging Activities." SFAS 133
replaces existing pronouncements and practices with a single, integrated
accounting framework for derivatives and hedging activities. This statement
requires that all derivatives be recognized on the balance sheet at fair value.
Derivatives that are not hedges must be adjusted to fair value through income.
If the derivative is a hedge, depending on the nature of the hedge, changes in
the fair value of derivatives will either be offset against the change in the
fair value of the hedged assets, liabilities, or firm commitments through
earnings or recognized in other comprehensive income until the hedged item is
recognized in earnings. Additionally, the change in fair value of a derivative
which is not effective as a hedge will be immediately recognized in earnings.
The delay was effected through the issuance of SFAS No. 137, which extends the
SFAS No. 133 requirements to fiscal years beginning after June 15, 2000. As
such, the Company expects to adopt the provisions of SFAS No. 133 as of January
1, 2001. The impact of this statement is dependent upon the Company's derivative
positions and market conditions existing at the date of adoption. Based on
existing interpretations of the requirements of SFAS
10
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
No. 133, the impact of the adoption is not expected to be material to the
results of operations or financial position of the Company.
3. RELATED PARTY TRANSACTIONS
REINSURANCE
The Company has reinsurance agreements with ALIC in order to limit aggregate and
single exposure on large risks. A portion of the Company's premiums and policy
benefits are ceded to ALIC and reflected net of such reinsurance in the
statements of operations and comprehensive income. Reinsurance recoverables and
the related reserve for life-contingent contract benefits and contractholder
funds are reported separately in the statements of financial position. The
Company continues to have primary liability as the direct insurer for risks
reinsured.
The following amounts were ceded to ALIC under reinsurance agreements.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Premiums $ 3,408 $ 2,519 $ 2,171
Policy benefits 211 315 327
</TABLE>
Included in reinsurance recoverables at December 31, 1999 and 1998 are the net
amounts owed to ALIC of $458 and $3, respectively.
STRUCTURED SETTLEMENT ANNUITIES
The Company issued $14,561, $12,747 and $12,766 of structured settlement
annuities, a type of immediate annuity, in 1999, 1998 and 1997, respectively, at
prices determined based upon interest rates in effect at the time of purchase,
to fund structured settlements in matters involving AIC. Of these amounts,
$4,298, $5,152 and $3,468 relate to structured settlement annuities with life
contingencies and are included in premium income in 1999, 1998 and 1997,
respectively. Additionally, the reserve for life-contingent contract benefits
was increased by approximately 94% of such premium received in each of these
years. In most cases, these annuities were issued to Allstate Settlement
Corporation ("ASC"), a subsidiary of ALIC, which, under a "qualified
assignment", assumed AIC's obligation to make the future payments.
AIC has issued surety bonds to guarantee the payment of structured settlement
benefits assumed by ASC (from both AIC and non-related parties) and funded by
certain annuity contracts issued by the Company. ASC has entered into General
Indemnity Agreements pursuant to which it indemnified AIC for any liabilities
associated with the surety bonds and gives AIC certain collateral security
rights with respect to the annuities and certain other rights in the event of
any defaults covered by the surety bonds. Reserves recorded by the Company for
annuities related to the surety bonds were $1.19 billion and $1.08 billion at
December 31, 1999 and 1998, respectively.
BUSINESS OPERATIONS
The Company utilizes services performed by AIC and ALIC and business facilities
owned or leased, and operated by AIC in conducting its business activities. In
addition, the Company shares the services of employees with AIC. The Company
reimburses AIC and ALIC for the operating expenses incurred on behalf of the
Company. The Company is charged for the cost of these operating expenses based
on the level of services provided. Operating expenses, including compensation
and retirement and other benefit programs, allocated to the Company were
$16,155, $23,369 and $19,425 in 1999, 1998 and 1997, respectively. A
11
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
portion of these expenses relate to the acquisition of business which are
deferred and amortized over the contract period.
4. INVESTMENTS
FAIR VALUES
The amortized cost, gross unrealized gains and losses, and fair value for fixed
income securities are as follows:
<TABLE>
<CAPTION>
GROSS UNREALIZED
AMORTIZED ---------------- FAIR
COST GAINS LOSSES VALUE
---- ----- ------ -----
<S> <C> <C> <C> <C>
AT DECEMBER 31, 1999
U.S. government and agencies $ 413,875 $ 53,717 $ (2,705) $ 464,887
Municipal 60,256 997 (1,976) 59,277
Corporate 996,298 36,303 (31,695) 1,000,906
Foreign government 61,987 3,217 (639) 64,565
Mortgage-backed securities 291,304 4,770 (7,370) 288,704
Asset-backed securities 34,496 26 (316) 34,206
-------------- -------------- -------------- --------------
Total fixed income securities $ 1,858,216 $ 99,030 $ (44,701) $ 1,912,545
============== ============== ============== ==============
AT DECEMBER 31, 1998
U.S. government and agencies $ 443,930 $ 179,455 $ (1) $ 623,384
Municipal 31,617 2,922 (19) 34,520
Corporate 848,289 121,202 (899) 968,592
Mortgage-backed securities 291,520 14,294 (700) 305,114
Asset-backed securities 33,616 869 (28) 34,457
-------------- -------------- -------------- --------------
Total fixed income securities $ 1,648,972 $ 318,742 $ (1,647) $ 1,966,067
============== ============== ============== ==============
</TABLE>
SCHEDULED MATURITIES
The scheduled maturities for fixed income securities are as follows at December
31, 1999:
<TABLE>
<CAPTION>
AMORTIZED FAIR
COST VALUE
---- -----
<S> <C> <C>
Due in one year or less $ 6,720 $ 6,798
Due after one year through five years 168,795 168,859
Due after five years through ten years 217,305 218,381
Due after ten years 1,139,596 1,195,597
--------------- ---------------
1,532,416 1,589,635
Mortgage- and asset-backed securities 325,800 322,910
--------------- ---------------
Total $ 1,858,216 $ 1,912,545
=============== ===============
</TABLE>
Actual maturities may differ from those scheduled as a result of prepayments by
the issuers.
12
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
<TABLE>
<CAPTION>
NET INVESTMENT INCOME
YEAR ENDED DECEMBER 31, 1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Fixed income securities $ 135,561 $ 124,100 $ 116,763
Mortgage loans 12,346 10,309 7,896
Other 3,495 2,940 2,200
------------- ------------- -------------
Investment income, before expense 151,402 137,349 126,859
Investment expense 3,071 2,936 1,972
------------- ------------- -------------
Net investment income $ 148,331 $ 134,413 $ 124,887
============= ============= =============
</TABLE>
REALIZED CAPITAL GAINS AND LOSSES
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Fixed income securities $ (2,207) $ 4,755 $ 955
Mortgage loans 42 (65) (221)
Other 69 7 (33)
------------ ----------- -------------
Realized capital gains and losses (2,096) 4,697 701
Income taxes (765) 1,644 245
------------ ----------- -------------
Realized capital gains and losses, after tax $ (1,331) $ 3,053 $ 456
============ =========== =============
</TABLE>
Excluding calls and prepayments, gross gains of $1,713, $2,905 and $471 and
gross losses of $3,920, $164 and $105 were realized on sales of fixed income
securities during 1999, 1998 and 1997, respectively.
UNREALIZED NET CAPITAL GAINS
Unrealized net capital gains on fixed income securities included in
shareholder's equity at December 31, 1999 are as follows:
<TABLE>
<CAPTION>
COST/ GROSS UNREALIZED UNREALIZED
AMORTIZED COST FAIR VALUE GAINS LOSSES NET GAINS
-------------- ---------- ----- ------ ---------
<S> <C> <C> <C> <C> <C>
Fixed income securities $1,858,216 $1,912,545 $ 99,030 $(44,701) $ 54,329
========== ========== ======== ========
Reserve for life-contingent
contract benefits (7,815)
Deferred income taxes (16,280)
--------
Unrealized net capital gains $ 30,234
========
</TABLE>
<TABLE>
<CAPTION>
CHANGE IN UNREALIZED NET CAPITAL GAINS
YEAR ENDED DECEMBER 31, 1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Fixed income securities $(262,766) $ 70,948 $123,519
Reserves for life contingent-contract benefits 179,891 (42,251) (80,155)
Deferred income taxes 28,362 (9,922) (14,876)
Deferred policy acquisition costs and other 1,841 (348) (861)
--------- -------- --------
(Decrease) increase in unrealized net capital gains $ (52,672) $ 18,427 $ 27,627
========= ======== ========
</TABLE>
13
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
INVESTMENT LOSS PROVISIONS AND VALUATION ALLOWANCES
Pretax provisions for investment losses, principally relating to valuation
allowances on mortgage loans were $114 and $261 in 1998 and 1997, respectively.
There was not a provision for investment losses in 1999.
MORTGAGE LOAN IMPAIRMENT
A mortgage loan is impaired when it is probable that the Company will be unable
to collect all amounts due according to the contractual terms of the loan
agreement.
The Company had no impaired loans at December 31, 1999 and 1998.
Valuation allowances for mortgage loans at December 31, 1999, 1998 and 1997 were
$600, $600 and $486, respectively. For the years ended December 31, 1999, 1998
and 1997, there were no reductions of the mortgage loan valuation allowance for
dispositions of impaired loans. Net additions to the mortgage loan valuation
allowances were $114 and $261 for the years ended December 31, 1998 and 1997,
respectively. There were no additions or reductions to the mortgage loan
valuation allowance for the year ended December 31, 1999.
INVESTMENT CONCENTRATION FOR MUNICIPAL BOND AND COMMERCIAL MORTGAGE PORTFOLIOS
AND OTHER INVESTMENT INFORMATION
The Company maintains a diversified portfolio of municipal bonds. The largest
concentrations in the portfolio are presented below. Except for the following,
holdings in no other state exceeded 5% of the portfolio at December 31, 1999:
<TABLE>
<CAPTION>
(% of municipal bond portfolio carrying value) 1999 1998
---- ----
<S> <C> <C>
Arizona 22.7% - %
California 20.2 17.4
Ohio 16.4 30.2
Illinois 11.6 21.1
Pennsylvania 7.5 -
Indiana 5.0 -
</TABLE>
The Company's mortgage loans are collateralized by a variety of commercial real
estate property types located throughout the United States. Substantially all of
the commercial mortgage loans are non-recourse to the borrower. The states with
the largest portion of the commercial mortgage loan portfolio are listed below.
Except for the following, holdings in no other state exceeded 5% of the
portfolio at December 31, 1999:
<TABLE>
<CAPTION>
(% of commercial mortgage portfolio carrying value) 1999 1998
---- ----
<S> <C> <C>
California 34.9% 41.9%
New York 27.6 26.3
Illinois 13.2 15.8
New Jersey 12.3 6.9
Pennsylvania 9.7 6.2
</TABLE>
14
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
The types of properties collateralizing the commercial mortgage loans at
December 31, are as follows:
<TABLE>
<CAPTION>
(% of commercial mortgage portfolio carrying value) 1999 1998
---- ----
<S> <C> <C>
Retail 33.1% 39.5%
Office buildings 18.9 11.7
Warehouse 18.5 19.2
Apartment complex 15.8 18.5
Industrial 4.6 5.5
Other 9.1 5.6
----- -----
100.0% 100.0%
===== =====
</TABLE>
The contractual maturities of the commercial mortgage loan portfolio as of
December 31, 1999, for loans that were not in foreclosure are as follows:
<TABLE>
<CAPTION>
NUMBER OF LOANS CARRYING VALUE PERCENT
--------------- -------------- -------
<S> <C> <C>
2000 2 $ 4,475 2.7%
2001 5 7,165 4.3
2002 2 5,904 3.5
2004 4 5,289 3.2
Thereafter 33 144,164 86.3
----- --------------- -----
Total 46 $ 166,997 100.0%
===== =============== =====
</TABLE>
In 1999, there were no commercial mortgage loans which were contractually due.
SECURITIES ON DEPOSIT
At December 31, 1999, fixed income securities with a carrying value of $1,903
were on deposit with regulatory authorities as required by law.
5. FINANCIAL INSTRUMENTS
In the normal course of business, the Company invests in various financial
assets, incurs various financial liabilities and enters into agreements
involving derivative financial instruments and other off-balance-sheet financial
instruments. The fair value estimates of financial instruments presented on the
following page are not necessarily indicative of the amounts the Company might
pay or receive in actual market transactions. Potential taxes and other
transaction costs have not been considered in estimating fair value. The
disclosures that follow do not reflect the fair value of the Company as a whole
since a number of the Company's significant assets (including deferred policy
acquisition costs and reinsurance recoverables) and liabilities (including
traditional life and interest-sensitive life insurance reserves and deferred
income taxes) are not considered financial instruments and are not carried at
fair value. Other assets and liabilities considered financial instruments such
as accrued investment income and cash are generally of a short-term nature.
Their carrying values are assumed to approximate fair value.
15
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
FINANCIAL ASSETS
The carrying value and fair value of financial assets at December 31, are as
follows:
<TABLE>
<CAPTION>
1999 1998
---- ----
CARRYING FAIR CARRYING FAIR
VALUE VALUE VALUE VALUE
----- ----- ----- -----
<S> <C> <C> <C> <C>
Fixed income securities $ 1,912,545 $ 1,912,545 $ 1,966,067 $ 1,966,067
Mortgage loans 166,997 159,853 145,095 154,872
Short-term investments 46,037 46,037 76,127 76,127
Policy loans 31,109 31,109 29,620 29,620
Separate Accounts 443,705 443,705 366,247 366,247
</TABLE>
CARRYING VALUE AND FAIR VALUE INCLUDE THE EFFECTS OF DERIVATIVE FINANCIAL
INSTRUMENTS WHERE APPLICABLE.
Fair values for fixed income securities are based on quoted market prices where
available. Non-quoted securities are valued based on discounted cash flows using
current interest rates for similar securities. Mortgage loans are valued based
on discounted contractual cash flows. Discount rates are selected using current
rates at which similar loans would be made to borrowers with similar
characteristics, using similar properties as collateral. Loans that exceed 100%
loan-to-value are valued at the estimated fair value of the underlying
collateral. Short-term investments are highly liquid investments with maturities
of less than one year whose carrying value are deemed to approximate fair value.
The carrying value of policy loans are deemed to approximate fair value.
Separate Accounts assets are carried in the statements of financial position at
fair value based on quoted market prices.
FINANCIAL LIABILITIES
The carrying value and fair value of financial liabilities at December 31, are
as follows:
<TABLE>
<CAPTION>
1999 1998
---- ----
CARRYING FAIR CARRYING FAIR
VALUE VALUE VALUE VALUE
----- ----- ----- -----
<S> <C> <C> <C> <C>
Contractholder funds on
investment contracts $ 627,488 $ 605,113 $ 512,239 $ 518,448
Separate Accounts 443,705 443,705 366,247 366,247
</TABLE>
The fair value of contractholder funds on investment contracts is based on the
terms of the underlying contracts. Reserves on investment contracts with no
stated maturities (single premium and flexible premium deferred annuities) are
valued at the account balance less surrender charges. The fair value of
immediate annuities and annuities without life contingencies with fixed terms is
estimated using discounted cash flow calculations based on interest rates
currently offered for contracts with similar terms and durations. Separate
Accounts liabilities are carried at the fair value of the underlying assets.
DERIVATIVE FINANCIAL INSTRUMENTS
The only derivative financial instruments used by the Company are financial
futures contracts. The Company primarily uses this derivative financial
instrument to reduce its exposure to market risk, specifically interest rate
risk, in conjunction with asset/liability management. The Company does not hold
or issue these instruments for trading purposes.
16
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
The following table summarizes the contract amount, credit exposure, fair value
and carrying value of the Company's derivative financial instruments:
<TABLE>
<CAPTION>
CARRYING
VALUE
CONTRACT CREDIT FAIR ASSETS/
AMOUNT EXPOSURE VALUE (LIABILITIES)
------ -------- ----- -------------
<S> <C> <C> <C> <C>
AT DECEMBER 31, 1999
Financial futures contracts $ 8,700 $ - $ (29) $ 588
AT DECEMBER 31, 1998
Financial futures contracts $ 15,000 $ - $ (15) $ (223)
</TABLE>
CARRYING VALUE IS REPRESENTATIVE OF DEFERRED GAINS AND LOSSES.
The contract amounts are used to calculate the exchange of contractual payments
under the agreements and are not representative of the potential for gain or
loss on these agreements.
Credit exposure represents the Company's potential loss if all of the
counterparties failed to perform under the contractual terms of the contracts
and all collateral, if any, became worthless. This exposure is measured by the
fair value of contracts with a positive fair value at the reporting date. The
Company manages its exposure to credit risk primarily by establishing risk
control limits. To date, the Company has not incurred any losses as financial
futures contracts have limited off-balance-sheet credit risk as they are
executed on organized exchanges and require daily cash settlement of margins.
Fair value is the estimated amount that the Company would receive (pay) to
terminate or assign the contracts at the reporting date, thereby taking into
account the current unrealized gains or losses of open contracts. Dealer and
exchange quotes are used to value the Company's derivatives.
Financial futures are commitments to either purchase or sell designated
financial instruments at a future date for a specified price or yield. They may
be settled in cash or through delivery. As part of its asset/liability
management, the Company generally utilizes financial futures contracts to manage
its market risk related to anticipatory investment purchases and sales.
Financial futures used as hedges of anticipatory transactions pertain to
identified transactions which are probable to occur and are generally completed
within 90 days.
Market risk is the risk that the Company will incur losses due to adverse
changes in market rates and prices. Market risk exists for all of the derivative
financial instruments that the Company currently holds, as these instruments may
become less valuable due to adverse changes in market conditions. The Company
mitigates this risk through established risk control limits set by senior
management. In addition, the change in the value of the Company's derivative
financial instruments designated as hedges are generally offset by the change in
the value of the related assets and liabilities.
OFF-BALANCE-SHEET FINANCIAL INSTRUMENTS
Commitments to extend mortgage loans are agreements to lend to a borrower
provided there is no violation of any condition established in the contract. The
Company enters into these agreements to commit to future loan fundings at a
predetermined interest rate. Commitments generally have fixed expiration dates
or other termination clauses. Commitments to extend mortgage loans, which are
secured by the underlying properties, are valued based on estimates of fees
charged by other institutions to make
17
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
similar commitments to borrowers. At December 31, 1999, the Company had $10,000
in mortgage loan commitments which had a fair value of $100. The Company had no
mortgage loan commitments at December 31, 1998.
6. DEFERRED POLICY ACQUISITION COSTS
Certain costs of acquiring business which were deferred and amortized for the
years ended December 31, 1999 and 1998 are as follows:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Balance, beginning of year $ 87,830 $ 71,946
Acquisition costs deferred 26,247 23,723
Amortization charged to income (8,861) (8,238)
Adjustment from unlocking assumptions (124) 1,209
Effect of unrealized gains/(losses) 1,840 (810)
------------ ------------
Balance, end of year $ 106,932 $ 87,830
============ ============
</TABLE>
7. RESERVE FOR LIFE-CONTINGENT CONTRACT BENEFITS AND CONTRACTHOLDER FUNDS
At December 31, the reserve for life-contingent contract benefits consists of
the following:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Immediate annuities:
Structured settlement annuities $ 1,024,049 $ 1,135,813
Other immediate annuities 2,933 2,577
Traditional life 70,254 68,511
Other 780 1,203
----------- ------------
Total life-contingent contract benefits $ 1,098,016 $ 1,208,104
=========== ============
</TABLE>
The assumptions for mortality generally utilized in calculating reserves
include, the U.S. population with projected calendar year improvements and age
setbacks for impaired lives for structured settlement annuities; the 1983 group
annuity mortality table for other immediate annuities; and actual Company
experience plus loading for traditional life. Interest rate assumptions vary
from 3.5% to 10.3% for immediate annuities and 4.5% to 7.0% for traditional
life. Other estimation methods include the present value of contractually fixed
future benefits for structured settlement annuities, the present value of
expected future benefits based on historical experience for other immediate
annuities and the net level premium reserve method using the Company's
withdrawal experience rates for traditional life.
Premium deficiency reserves are established, if necessary and have been recorded
for the structured settlement annuity business, to the extent the unrealized
gains on fixed income securities would result in a premium deficiency had those
gains actually been realized. A liability of $8 million and $188 million is
included in the reserve for life-contingent contract benefits with respect to
this deficiency for the years ended December 31, 1999 and 1998, respectively.
The decrease in this liability in 1999 reflects declines in unrealized capital
gains on fixed income securities.
18
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
At December 31, contractholder funds consists of the following:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Interest-sensitive life $211,729 $189,970
Fixed annuities:
Immediate annuities 303,564 285,977
Deferred annuities 273,864 177,317
Other investment contracts 50,000 50,000
-------- --------
Total contractholder funds $839,157 $703,264
======== ========
</TABLE>
Contractholder funds are equal to deposits received, net of commissions, and
interest credited to the benefit of the contractholder less withdrawals,
mortality charges and administrative expenses. Interest rates credited range
from 5.5% to 6.5% for interest-sensitive life contracts; 3.5% to 9.8% for
immediate annuities; 4.0% to 7.9% for deferred annuities and 6.6% for other
investment contracts. Withdrawal and surrender charge protection includes: i)
for interest-sensitive life, either a percentage of account balance or dollar
amount grading off generally over 20 years; and ii) for deferred annuities not
subject to a market value adjustment, either a declining or a level percentage
charge generally over nine years or less. Approximately 2% of deferred annuities
are subject to a market value adjustment.
8. CORPORATION RESTRUCTURING
On November 10, 1999 the Corporation announced a series of strategic initiatives
to aggressively expand its selling and servicing capabilities. The Corporation
also announced that it is implementing a program to reduce expenses by
approximately $600 million. The reduction will result in the elimination of
approximately 4,000 current non-agent positions, across all employment grades
and categories by the end of 2000, or approximately 10% of the Corporation's
non-agent work force. The impact of the reduction in employee positions is not
expected to materially impact the results of operations of the Company.
These cost reductions are part of a larger initiative to redeploy the cost
savings to finance new initiatives including investments in direct access and
internet channels for new sales and service capabilities, new competitive
pricing and underwriting techniques, new agent and claim technology and enhanced
marketing and advertising. As a result of the cost reduction program, the
Corporation recorded restructuring and related charges of $81 million pretax
during the fourth quarter of 1999. The Corporation anticipates that additional
pretax restructuring related charges of approximately $100 million will be
expensed as incurred throughout 2000. The Company's allocable share of these
expenses were immaterial in 1999 and are expected to be immaterial in 2000.
9. INCOME TAXES
The Company joins the Corporation and its other eligible domestic subsidiaries
(the "Allstate Group") in the filing of a consolidated federal income tax return
and is party to a federal income tax allocation agreement (the "Allstate Tax
Sharing Agreement"). Under the Allstate Tax Sharing Agreement, the Company pays
to or receives from the Corporation the amount, if any, by which the Allstate
Group's federal income tax liability is affected by virtue of inclusion of the
Company in the consolidated federal income tax return. Effectively, this
19
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
results in the Company's annual income tax provision being computed, with
adjustments, as if the Company filed a separate return.
Prior to June 30, 1995, the Corporation was a subsidiary of Sears, Roebuck & Co.
("Sears") and, with its eligible domestic subsidiaries, was included in the
Sears consolidated federal income tax return and federal income tax allocation
agreement. Effective June 30, 1995, the Corporation and Sears entered into a new
tax sharing agreement, which governs their respective rights and obligations
with respect to federal income taxes for all periods during which the
Corporation was a subsidiary of Sears, including the treatment of audits of tax
returns for such periods.
The Internal Revenue Service ("IRS") has completed its review of the Allstate
Group's federal income tax returns through the 1993 tax year. Any adjustments
that may result from IRS examinations of tax returns are not expected to have a
material impact on the financial position, liquidity or results of operations of
the Company.
The components of the deferred income tax assets and liabilities at December 31,
are as follows:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
DEFERRED ASSETS
Life and annuity reserves $ 42,248 $ 41,073
Discontinued operations 366 364
Other postretirement benefits 296 328
Other assets 1,319 2,023
------------- -------------
Total deferred assets 44,229 43,788
DEFERRED LIABILITIES
Deferred policy acquisition costs (25,790) (20,573)
Unrealized net capital gains (16,280) (44,642)
Difference in tax bases of investments (3,194) (1,784)
Prepaid commission expense (682) (790)
Other liabilities (1,360) (1,448)
------------- -------------
Total deferred liabilities (47,306) (69,237)
------------- -------------
Net deferred liability $ (3,077) $ (25,449)
============= =============
</TABLE>
The components of income tax expense for the year ended December 31, are as
follows:
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Current $ 8,650 $ 13,679 $ 14,874
Deferred 5,990 1,255 (1,578)
-------- -------- --------
Total income tax expense $ 14,640 $ 14,934 $ 13,296
======== ======== ========
</TABLE>
The Company paid income taxes of $12,547, $3,788 and $13,350 in 1999, 1998 and
1997, respectively.
20
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
A reconciliation of the statutory federal income tax rate to the effective
income tax rate on income from operations for the year ended December 31, is as
follows:
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Statutory federal income tax rate 35.0% 35.0% 35.0%
State income tax expense 1.6 1.6 2.2
Other (1.1) (1.5) (.3)
----- ----- -----
Effective income tax rate 35.5% 35.1% 36.9%
===== ===== =====
</TABLE>
Prior to January 1, 1984, the Company was entitled to exclude certain amounts
from taxable income and accumulate such amounts in a "policyholder surplus"
account. The balance in this account at December 31, 1999, approximately $389,
will result in federal income taxes payable of $136 if distributed by the
Company. No provision for taxes has been made as the Company has no plan to
distribute amounts from this account. No further additions to the account have
been permitted since the Tax Reform Act of 1984.
10. STATUTORY FINANCIAL INFORMATION
The Company's statutory capital and surplus was $214,738 and $196,416 at
December 31, 1999 and 1998, respectively. The Company's statutory net income was
$18,767, $13,649 and $18,592 for the years ended December 31, 1999, 1998 and
1997, respectively.
PERMITTED STATUTORY ACCOUNTING PRACTICES
The Company prepares its statutory financial statements in accordance with
accounting practices prescribed or permitted by the New York Department of
Insurance. Prescribed statutory accounting practices include a variety of
publications of the National Association of Insurance Commissioners ("NAIC"), as
well as state laws, regulations and general administrative rules. Permitted
statutory accounting practices encompass all accounting practices not so
prescribed. The Company does not follow any permitted statutory accounting
practices that have a significant impact on statutory surplus or statutory net
income.
The NAIC's codification initiative has produced a comprehensive guide of
statutory accounting principles, which the Company will implement in January
2001. The Company's state of domicile, New York, continues to review
codification and existing statutory accounting requirements for desired
revisions to existing state laws and regulations. The requirements are not
expected to have a material impact on the statutory surplus of the Company.
DIVIDENDS
The ability of the Company to pay dividends is dependent on business conditions,
income, cash requirements of the Company and other relevant factors. Under New
York Insurance Law, a notice of intention to distribute any dividend must be
filed with the New York Superintendent of Insurance not less than 30 days prior
to the distribution. Such proposed declaration is subject to the
Superintendent's disapproval.
RISK-BASED CAPITAL
The NAIC has a standard for assessing the solvency of insurance companies, which
is referred to as risk-based capital ("RBC"). The requirement consists of a
formula for determining each insurer's RBC and a model law specifying regulatory
actions if an insurer's RBC falls below specified levels. The RBC formula for
life insurance companies establishes capital requirements relating to insurance,
business, asset and
21
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
interest rate risks. At December 31, 1999, RBC for the Company was significantly
above a level that would require regulatory action.
11. BENEFIT PLANS
PENSION PLANS
Defined benefit pension plans, sponsored by AIC, cover domestic full-time
employees and certain part-time employees. Benefits under the pension plans are
based upon the employee's length of service, average annual compensation and
estimated social security retirement benefits. AIC's funding policy for the
pension plans is to make annual contributions in accordance with accepted
actuarial cost methods. The (benefit) and cost to the Company included in net
income was $(263), $382 and $597 for the pension plans in 1999, 1998 and 1997,
respectively.
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
AIC also provides certain health care and life insurance benefits for retired
employees. Qualified employees may become eligible for these benefits if they
retire in accordance with AIC's established retirement policy and are
continuously insured under AIC's group plans or other approved plans for ten or
more years prior to retirement. AIC shares the cost of the retiree medical
benefits with retirees based on years of service, with AIC's share being subject
to a 5% limit on annual medical cost inflation after retirement. AIC's
postretirement benefit plans currently are not funded. AIC has the right to
modify or terminate these plans.
PROFIT SHARING FUND
Employees of the Corporation and its domestic subsidiaries, including the
Company are also eligible to become members of The Savings and Profit Sharing
Fund of Allstate Employees ("Allstate Plan"). The Corporation's contributions
are based on the Corporation's matching obligation and performance.
The Company paid $176, $567, $164 in 1999, 1998 and 1997, respectively for
profit sharing.
12. OTHER COMPREHENSIVE INCOME
The components of other comprehensive income on a pretax and after-tax basis for
the year ended December 31, are as follows:
<TABLE>
<CAPTION>
1999 1998 1997
------------------------------ ----------------------------- ------------------------------
AFTER- AFTER- AFTER-
PRETAX TAX TAX PRETAX TAX TAX PRETAX TAX TAX
------ --- ------ ------ --- ------- ------ ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
UNREALIZED CAPITAL GAINS
AND LOSSES:
Unrealized holding
(losses) gains arising
during the period $(83,241) $ 29,134 $(54,107) $ 33,218 $(11,626) $ 21,592 $ 43,686 $(15,290) $ 28,396
Less: reclassification
adjustments (2,207) 772 (1,435) 4,869 (1,704) 3,165 1,183 (414) 769
-------- -------- -------- -------- -------- -------- -------- -------- --------
Unrealized net capital
(losses) gains (81,034) 28,362 (52,672) 28,349 (9,922) 18,427 42,503 (14,876) 27,627
-------- -------- -------- -------- -------- -------- -------- -------- --------
Other comprehensive
(loss) income $(81,034) $ 28,362 $(52,672) $ 28,349 $ (9,922) $ 18,427 $ 42,503 $(14,876) $ 27,627
======== ======== ========= ======== ======== ======== ======== ======== ========
</TABLE>
22
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
13. COMMITMENTS AND CONTINGENT LIABILITIES
REGULATIONS AND LEGAL PROCEEDINGS
The Company's business is subject to the effect of a changing social, economic
and regulatory environment. Public and regulatory initiatives have varied and
have included employee benefit regulation, controls on medical care costs,
removal of barriers preventing banks from engaging in the securities and
insurance business, tax law changes affecting the taxation of insurance
companies, the tax treatment of insurance products and its impact on the
relative desirability of various personal investment vehicles, and proposed
legislation to prohibit the use of gender in determining insurance rates and
benefits. The ultimate changes and eventual effects, if any, of these
initiatives are uncertain.
From time to time the Company is involved in pending and threatened litigation
in the normal course of its business in which claims for monetary damages are
asserted. In the opinion of management, the ultimate liability, if any, arising
from such pending or threatened litigation is not expected to have a material
effect on the results of operations, liquidity or financial position of the
Company.
GUARANTY FUNDS
Under state insurance guaranty fund laws, insurers doing business in a state can
be assessed, up to prescribed limits, for certain obligations of insolvent
insurance companies to policyholders and claimants. The Company's expense
related to these funds have been immaterial.
MARKETING AND COMPLIANCE ISSUES
Companies operating in the insurance and financial services markets have come
under the scrutiny of regulators with respect to market conduct and compliance
issues. Under certain circumstances, companies have been held responsible for
providing incomplete or misleading sales materials and for replacing existing
policies with policies that were less advantageous to the policyholder. The
Company monitors its sales materials and enforces compliance procedures to
mitigate any exposure to potential litigation. The Company is a member of the
Insurance Marketplace Standards Association, an organization which advocates
ethical market conduct.
23
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
SCHEDULE IV--REINSURANCE
($ IN THOUSANDS)
<TABLE>
<CAPTION>
GROSS NET
YEAR ENDED DECEMBER 31, 1999 AMOUNT CEDED AMOUNT
- ---------------------------- ------ ----- ------
<S> <C> <C> <C>
Life insurance in force $ 14,140,049 $ 1,066,993 $ 13,073,056
============ =========== ============
Premiums and contract charges:
Life and annuities $ 99,760 $ 3,397 $ 96,363
Accident and health 6,867 856 6,011
------------ ----------- ------------
$ 106,627 $ 4,253 $ 102,374
============ =========== ============
</TABLE>
<TABLE>
<CAPTION>
GROSS NET
YEAR ENDED DECEMBER 31, 1998 AMOUNT CEDED AMOUNT
- ---------------------------- ------ ----- ------
<S> <C> <C> <C>
Life insurance in force $ 12,656,826 $ 857,500 $ 11,799,326
============ =========== ============
Premiums and contract charges:
Life and annuities $ 116,455 $ 2,318 $ 114,137
Accident and health 5,801 886 4,915
------------ ----------- ------------
$ 122,256 $ 3,204 $ 119,052
============ =========== ============
</TABLE>
<TABLE>
<CAPTION>
GROSS NET
YEAR ENDED DECEMBER 31, 1997 AMOUNT CEDED AMOUNT
- ---------------------------- ------ ----- ------
<S> <C> <C> <C>
Life insurance in force $ 11,339,990 $ 721,040 $ 10,618,950
============ =========== ============
Premiums and contract charges:
Life and annuities $ 116,167 $ 2,185 $ 113,982
Accident and health 5,883 902 4,981
------------ ----------- ------------
$ 122,050 $ 3,087 $ 118,963
============ =========== ============
</TABLE>
24
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
SCHEDULE V--VALUATION AND QUALIFYING ACCOUNTS
($ IN THOUSANDS)
<TABLE>
<CAPTION>
BALANCE AT CHARGED TO BALANCE AT
BEGINNING COSTS AND END OF
OF PERIOD EXPENSES DEDUCTIONS PERIOD
--------- -------- ---------- ------
<S> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1999
Allowance for estimated losses
on mortgage loans $ 600 $ - $ - $ 600
============ ============ ============ ============
YEAR ENDED DECEMBER 31, 1998
Allowance for estimated losses
on mortgage loans $ 486 $ 114 $ - $ 600
============ ============ ============ ============
YEAR ENDED DECEMBER 31, 1997
Allowance for estimated losses
on mortgage loans $ 225 $ 261 $ - $ 486
============ ============ ============ ============
</TABLE>
25
<PAGE>
<PAGE>
---------------------------------------------
ALLSTATE LIFE OF NEW
YORK SEPARATE
ACCOUNT A
FINANCIAL STATEMENTS AS OF DECEMBER 31, 1999
AND FOR THE PERIODS ENDED DECEMBER 31, 1999
AND DECEMBER 31, 1998 AND INDEPENDENT
AUDITORS' REPORT
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholder of
Allstate Life Insurance Company of New York:
We have audited the accompanying statement of net assets of Allstate Life of
New York Separate Account A as of December 31, 1999 (including the assets of
each of the individual sub-accounts which comprise the Account as disclosed
in Note 1), and the related statements of operations for the period then
ended and the statements of changes in net assets for each of the periods in
the two year period then ended for each of the individual sub-accounts which
comprise the Account. These financial statements are the responsibility of
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
Our procedures included confirmation of securities owned at December 31, 1999
by correspondence with the account custodians. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Allstate Life of New York Separate
Account A as of December 31, 1999 (including the assets of each of the
individual sub-accounts which comprise the Account), and the results of
operations for each of the individual sub-accounts for the period then ended
and the changes in their net assets for each of the periods in the two year
period then ended in conformity with generally accepted accounting principles.
/s/ Deloitte & Touche LLP
Chicago, Illinois
March 27, 2000
<PAGE>
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS
DECEMBER 31, 1999
- ------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
Allocation to Sub-Accounts investing in the AIM Variable Insurance Funds:
Aggressive Growth, 12,432 shares (cost $158,759) $ 177,153
Balanced Fund, 6,444 shares (cost $79,572) 84,024
Capital Appreciation, 255,543 shares (cost $6,215,783) 9,092,204
Capital Development, 3,871 shares (cost $40,870) 46,028
Diversified Income, 262,808 shares (cost $2,884,027) 2,643,852
Global Utilities, 55,043 shares (cost $987,756) 1,254,971
Government Securities, 114,229 shares (cost $1,272,606) 1,214,257
Growth, 300,263 shares (cost $7,319,062) 9,683,482
Growth and Income, 493,077 shares (cost $11,214,069) 15,576,292
High Yield, 1,933 shares (cost $17,487) 17,433
International Equity, 165,155 shares (cost $3,272,322) 4,837,388
Money Market, 1,578,022 shares (cost $1,578,022) 1,578,022
Value, 665,744 shares (cost $17,789,516) 22,302,412
--------------
Total Assets 68,507,518
LIABILITIES
Payable to Allstate Life Insurance Company of New York:
Accrued contract maintenance charges 19,014
--------------
Net Assets $ 68,488,504
==============
</TABLE>
See notes to financial statements.
2
<PAGE>
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------------------
AIM Variable Insurance Funds Sub-Accounts
---------------------------------------------------------------------------
For the Period Ended December 31, 1999
---------------------------------------------------------------------------
Aggressive Capital Capital Diversified
Growth (a) Balanced (a) Appreciation Development (a) Income
---------- ------------ ------------ --------------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends $ - $ 1,095 $ 188,516 $ - $ 164,843
Charges from Allstate Life Insurance Company
of New York
Mortality and expense risk (143) (119) (76,212) (56) (28,287)
Administrative expense (11) (9) (5,645) (4) (2,095)
---------- ------------ ------------ --------------- -------------
Net investment income (loss) (154) 967 106,659 (60) 134,461
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Realized gains (losses) from sales of investments:
Proceeds from sales 123 189 324,982 55 476,703
Cost of investments sold 117 182 276,808 52 493,648
---------- ------------ ------------ --------------- -------------
Net realized gains (losses) 6 7 48,174 3 (16,945)
---------- ------------ ------------ --------------- -------------
Change in unrealized gains (losses) 18,394 4,451 2,401,290 5,157 (181,607)
---------- ------------ ------------ --------------- -------------
Net gains (losses) on investments 18,400 4,458 2,449,464 5,160 (198,552)
---------- ------------ ------------ --------------- -------------
CHANGE IN NET ASSETS
RESULTING FROM OPERATIONS $ 18,246 $ 5,425 $2,556,123 $ 5,100 $ (64,091)
========== ============ ============ =============== =============
</TABLE>
(a) For the Period Beginning October 25, 1999 and Ended December 31, 1999
See notes to financial statements.
3
<PAGE>
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------------
AIM Variable Insurance Funds Sub-Accounts
------------------------------------------------------------------------
For the Period Ended December 31, 1999
------------------------------------------------------------------------
Global Government Growth High
Utilities Securities Growth and Income Yield (a)
----------- ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends $ 18,906 $ 43,946 $ 337,039 $ 129,184 $ 399
Charges from Allstate Life Insurance Company
of New York
Mortality and expense risk (9,493) (32,564) (83,130) (132,390) (14)
Administrative expense (703) (2,412) (6,158) (9,807) (1)
----------- ------------ ------------ ------------ -------------
Net investment income (loss) 8,710 8,970 247,751 (13,013) 384
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Realized gains (losses) from sales of investments:
Proceeds from sales 157,147 2,759,791 423,990 458,270 15
Cost of investments sold 137,026 2,894,175 359,129 380,204 15
----------- ------------ ------------ ------------ -------------
Net realized gains (losses) 20,121 (134,384) 64,861 78,066 -
----------- ------------ ------------ ------------ -------------
Change in unrealized gains (losses) 236,069 (54,186) 1,792,381 3,178,263 (54)
----------- ------------ ------------ ------------ -------------
Net gains (losses) on investments 256,190 (188,570) 1,857,242 3,256,329 (54)
----------- ------------ ------------ ------------ -------------
CHANGE IN NET ASSETS
RESULTING FROM OPERATIONS $ 264,900 $ (179,600) $2,104,993 $3,243,316 $ 330
=======-=== ============ ============ ============ =============
</TABLE>
(a) For the Period Beginning October 25, 1999 and Ended December 31, 1999
See notes to financial statements.
4
<PAGE>
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
- -----------------------------------------------------------------------------------------------------------------
AIM Variable Insurance Funds Sub-Accounts
---------------------------------------------------------
For the Period Ended December 31, 1999
---------------------------------------------------------
International Money
Equity Market Value
-------------- ------------ -------------
<S> <C> <C> <C>
INVESTMENT INCOME
Dividends $ 154,775 $ 61,128 $ 355,310
Charges from Allstate Life Insurance Company
of New York
Mortality and expense risk (37,180) (17,854) (173,801)
Administrative expense (2,754) (1,322) (12,874)
-------------- ------------ -------------
Net investment income (loss) 114,841 41,952 168,635
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Realized gains (losses) from sales of investments:
Proceeds from sales 300,780 1,206,358 530,128
Cost of investments sold 248,263 1,206,358 459,369
-------------- ------------ -------------
Net realized gains (losses) 52,517 - 70,759
-------------- ------------ -------------
Change in unrealized gains (losses) 1,419,551 - 3,419,919
-------------- ------------ -------------
Net gains (losses) on investments 1,472,068 - 3,490,678
-------------- ------------ -------------
CHANGE IN NET ASSETS
RESULTING FROM OPERATIONS $1,586,909 $ 41,952 $ 3,659,313
============== ============ =============
</TABLE>
See notes to financial statements.
5
<PAGE>
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED DECEMBER 31,
- --------------------------------------------------------------------------------------------------------------------------
AIM Variable Insurance Funds Sub-Accounts
-------------------------------------------------------------------------
Aggressive Capital
Growth Balanced Capital Appreciation Development
------------ ------------ ----------------------------- ------------
1999 (a) 1999 (a) 1999 1998 1999 (a)
------------ ------------ ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ (154) $ 967 $ 106,659 $ 66,071 $ (60)
Net realized gains (losses) 6 7 48,174 760 3
Change in unrealized gains (losses) 18,394 4,451 2,401,290 457,939 5,157
------------ ------------ ------------- ------------- ------------
Change in net assets resulting from operations 18,246 5,425 2,556,123 524,770 5,100
------------ ------------ ------------- ------------- ------------
FROM CAPITAL TRANSACTIONS
Deposits 43,819 49,251 2,073,160 2,056,465 17,015
Benefit payments - - (23,548) (29,888) -
Payments on termination - (79) (225,136) (115,473) -
Contract maintenance charges (48) (24) (3,267) (1,759) (12)
Transfers among the sub-accounts
and with the Fixed Account - net 115,087 29,427 408,212 (181,131) 23,912
------------ ------------ ------------- ------------- ------------
Change in net assets resulting
from capital transactions 158,858 78,575 2,229,421 1,728,214 40,915
------------ ------------ ------------- ------------- ------------
INCREASE (DECREASE) IN NET ASSETS 177,104 84,000 4,785,544 2,252,984 46,015
NET ASSETS AT BEGINNING OF PERIOD - - 4,304,137 2,051,153 -
------------ ------------ ------------- ------------- ------------
NET ASSETS AT END OF PERIOD $ 177,104 $ 84,000 $ 9,089,681 $ 4,304,137 $ 46,015
============ ============ ============= ============= ============
</TABLE>
(a) For the Period Beginning October 25, 1999 and Ended December 31, 1999
See notes to financial statements.
6
<PAGE>
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED DECEMBER 31,
- -----------------------------------------------------------------------------------------------------------------------------
AIM Variable Insurance Funds Sub-Accounts
----------------------------------------------------------------------------
Diversified Income Global Utilities Government Securities
------------------------- ------------------------ --------------------------
1999 1998 1999 1998 1999 1998
------------ ------------ ------------ ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 134,461 $ 94,730 $ 8,710 $ 4,558 $ 8,970 $ 79,067
Net realized gains (losses) (16,945) 7,969 20,121 (484) (134,384) 109,308
Change in unrealized gains (losses) (181,607) (85,959) 236,069 24,459 (54,186) (23,404)
------------ ------------ ------------ ----------- ------------ ------------
Change in net assets resulting from operations (64,091) 16,740 264,900 28,533 (179,600) 164,971
------------ ------------ ------------ ----------- ------------ ------------
FROM CAPITAL TRANSACTIONS
Deposits 1,187,532 1,222,826 734,901 356,711 635,526 2,725,221
Benefit payments (12,220) (32,778) (3,120) (4,815) (661,198) -
Payments on termination (185,900) (37,509) (82,757) (3,609) (403,351) (8,618)
Contract maintenance charges (810) (491) (463) (223) 317 (913)
Transfers among the sub-accounts
and with the Fixed Account - net (46,215) (98,970) (53,342) (93,970) (1,749,948) 268,867
------------ ------------ ------------ ----------- ------------ ------------
Change in net assets resulting
from capital transactions 942,387 1,053,078 595,219 254,094 (2,178,654) 2,984,557
------------ ------------ ------------ ----------- ------------ ------------
INCREASE (DECREASE) IN NET ASSETS 878,296 1,069,818 860,119 282,627 (2,358,254) 3,149,528
------------ ------------ ------------ ----------- ------------ ------------
NET ASSETS AT BEGINNING OF PERIOD 1,764,822 695,004 394,504 111,877 3,572,174 422,646
------------ ------------ ------------ ----------- ------------ ------------
NET ASSETS AT END OF PERIOD $2,643,118 $1,764,822 $1,254,623 $ 394,504 $1,213,920 $3,572,174
============ ============ ============ =========== ============ ============
</TABLE>
See notes to financial statements.
7
<PAGE>
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED DECEMBER 31,
- --------------------------------------------------------------------------------------------------------------------
AIM Variable Insurance Funds Sub-Accounts
-------------------------------------------------------------------
Growth Growth and Income High Yield
-------------------------- --------------------------- ----------
1999 1998 1999 1998 1999 (a)
------------ ------------ ------------- ------------ ----------
<S> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 247,751 $ 225,339 $ (13,013) $ 21,895 $ 384
Net realized gains (losses) 64,861 29,091 78,066 17,916 -
Change in unrealized gains (losses) 1,792,381 542,074 3,178,263 1,076,360 (54)
------------ ------------ ------------- ------------ ----------
Change in net assets resulting from operations 2,104,993 796,504 3,243,316 1,116,171 330
------------ ------------ ------------- ------------ ----------
FROM CAPITAL TRANSACTIONS
Deposits 3,265,114 2,076,025 5,424,896 3,226,558 17,103
Benefit payments (26,647) (7,214) (46,523) (82,435) -
Payments on termination (298,191) (100,412) (319,041) (161,641) -
Contract maintenance charges (3,399) (1,377) (5,525) (2,399) (5)
Transfers among the sub-accounts
and with the Fixed Account - net 453,397 30,657 672,802 75,882 -
------------ ------------ ------------- ------------ ----------
Change in net assets resulting
from capital transactions 3,390,274 1,997,679 5,726,609 3,055,965 17,098
------------ ------------ ------------- ------------ ----------
INCREASE (DECREASE) IN NET ASSETS 5,495,267 2,794,183 8,969,925 4,172,136 17,428
NET ASSETS AT BEGINNING OF PERIOD 4,185,527 1,391,344 6,602,044 2,429,908 -
------------ ------------ ------------- ------------ ----------
NET ASSETS AT END OF PERIOD $9,680,794 $4,185,527 $15,571,969 $6,602,044 $ 17,428
============ ============ ============= ============ ==========
</TABLE>
(a) For the Period Beginning October 25, 1999 and Ended December 31, 1999
See notes to financial statements.
8
<PAGE>
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED DECEMBER 31,
- ----------------------------------------------------------------------------------------------------------------------------------
AIM Variable Insurance Funds Sub-Accounts
----------------------------------------------------------------------------------
International Equity Money Market Value
-------------------------- ------------------------- ---------------------------
1999 1998 1999 1998 1999 1998
------------ ------------ ------------ ----------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 114,841 $ (7,420) $ 41,952 $ 26,737 $ 168,635 $ 261,042
Net realized gains (losses) 52,517 5,640 - - 70,759 32,103
Change in unrealized gains (losses) 1,419,551 165,760 - - 3,419,919 1,022,492
------------ ------------ ------------ ----------- ------------- ------------
Change in net assets resulting from operations 1,586,909 163,980 41,952 26,737 3,659,313 1,315,637
------------ ------------ ------------ ----------- ------------- ------------
FROM CAPITAL TRANSACTIONS
Deposits 1,110,124 716,187 1,305,204 509,817 11,613,584 3,273,006
Benefit payments (27,341) (6,664) (28,371) (36,887) (57,538) (7,168)
Payments on termination (93,590) (33,261) (413,731) (16,252) (646,773) (103,596)
Contract maintenance charges (1,428) (726) (468) (218) (7,380) (2,602)
Transfers among the sub-accounts
and with the Fixed Account - net 298,246 41,000 (295,054) 32,193 584,939 235,246
------------ ------------ ------------ ----------- ------------- ------------
Change in net assets resulting
from capital transactions 1,286,011 716,536 567,580 488,653 11,486,832 3,394,886
------------ ------------ ------------ ----------- ------------- ------------
INCREASE (DECREASE) IN NET ASSETS 2,872,920 880,516 609,532 515,390 15,146,145 4,710,523
NET ASSETS AT BEGINNING OF PERIOD 1,963,126 1,082,610 968,052 452,662 7,150,077 2,439,554
------------ ------------ ------------ ----------- ------------- ------------
NET ASSETS AT END OF PERIOD $4,836,046 $1,963,126 $1,577,584 $ 968,052 $22,296,222 $7,150,077
============ ============ ============ =========== ============= ============
</TABLE>
See notes to financial statements.
9
<PAGE>
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. ORGANIZATION
Allstate Life of New York Separate Account A (the "Account"), a unit
investment trust registered with the Securities and Exchange Commission
under the Investment Company Act of 1940, is a Separate Account of
Allstate Life Insurance Company of New York ("Allstate New York"). The
assets of the Account are legally segregated from those of Allstate New
York. Allstate New York is wholly owned by Allstate Life Insurance
Company, a wholly owned subsidiary of Allstate Insurance Company, which is
wholly owned by The Allstate Corporation.
Allstate New York issues two variable annuity contracts, the AIM Lifetime
Plus-SM- ("Lifetime Plus") and the AIM Lifetime Plus-SM-II ("Lifetime Plus
II"), the deposits of which are invested at the direction of the
contractholders in the sub-accounts that comprise the Account. Absent any
contract provisions wherein Allstate New York contractually guarantees
either a minimum return or account value to the beneficiaries of the
contractholders in the form of a death benefit, the contractholders bear
the investment risk that the sub-accounts may not meet their stated
objectives. The sub-accounts invest in the following underlying mutual
fund portfolios of the AIM Variable Insurance Funds (the "Funds").
Aggressive Growth Growth
Balanced Growth and Income
Capital Appreciation High Yield
Capital Development International Equity
Diversified Income Money Market
Global Utilities Value
Government Securities
Allstate New York provides insurance and administrative services to the
contractholders for a fee. Allstate New York also maintains a fixed
account ("Fixed Account"), to which contractholders may direct their
deposits and receive a fixed rate of return. Allstate New York has sole
discretion to invest the assets of the Fixed Account, subject to
applicable law.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
VALUATION OF INVESTMENTS - Investments consist of shares of the Funds,
and are stated at fair value based on quoted market prices at
December 31, 1999.
INVESTMENT INCOME - Investment income consists of dividends declared by
the Funds and is recognized on the ex-dividend date.
REALIZED GAINS AND LOSSES - Realized gains and losses represent the
difference between the proceeds from sales of portfolio shares by the
Account and the cost of such shares, which is determined on a weighted
average basis.
10
<PAGE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
FEDERAL INCOME TAXES - The Account intends to qualify as a segregated
asset account as defined in the Internal Revenue Code ("Code"). As such,
the operations of the Account are included in the tax return of Allstate
New York. Allstate New York is taxed as a life insurance company under the
Code. No federal income taxes are allocable to the Account as the Account
did not generate taxable income.
USE OF ESTIMATES - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could differ
from those estimates.
3. EXPENSES
ADMINISTRATIVE EXPENSE CHARGE - Allstate New York deducts administrative
expense charges daily at a rate equal to .10% per annum of the average
daily net assets of the Account for the Lifetime Plus and Lifetime Plus
II. Allstate New York guarantees that the amount of this charge will not
increase over the life of the contract.
CONTRACT MAINTENANCE CHARGE - Allstate New York deducts an annual
maintenance charge of $35 for Lifetime Plus and Lifetime Plus II on each
contract anniversary and guarantees that this charge will not increase
over the life of the contract. This charge will be waived if certain
conditions are met.
MORTALITY AND EXPENSE RISK CHARGE - Allstate New York assumes mortality
and expense risks related to the operations of the Account and deducts
charges daily based on the daily net assets of the Account. The mortality
and expense risk charge covers insurance benefits available with the
contract and certain expenses of the contract. It also covers the risk
that the current charges will not be sufficient in the future to cover the
cost of administering the contract. Allstate New York guarantees that the
amount of this charge will not increase over the life of the contract. At
the contractholder's discretion, additional options, primarily death
benefits, may be purchased for an additional charge.
11
<PAGE>
4. UNITS ISSUED AND REDEEMED
<TABLE>
<CAPTION>
(Units in whole amounts) Unit activity during 1999
---------------------------------------------
Accumulation
Units Outstanding Units Units Units Outstanding Unit Value
December 31, 1998 Issued Redeemed December 31, 1999 December 31, 1999
----------------- ------------ ------------ ----------------- -----------------
<S> <C> <C> <C> <C> <C>
Investments in the AIM Variable Insurance
Funds Sub-Accounts:
Aggressive Growth - 12,664 (3) 12,661 $ 13.99
Balanced - 6,390 (8) 6,382 13.16
Capital Appreciation 287,336 167,925 (29,513) 425,748 21.35
Capital Development - 3,949 (1) 3,948 11.66
Diversified Income 146,644 128,234 (47,677) 227,201 11.63
Global Utilities 25,418 45,026 (9,036) 61,408 20.43
Government Securities 301,983 79,492 (272,981) 108,494 11.19
Growth 220,831 192,666 (30,283) 383,214 25.26
Growth and Income 361,890 324,260 (41,017) 645,133 24.14
High Yield - 1,751 - 1,751 9.96
International Equity 136,898 105,320 (21,528) 220,690 21.91
Money Market 87,010 167,828 (117,406) 137,432 11.48
Value 405,246 646,140 (64,309) 987,077 22.59
Units relating to accrued contract maintenance charges are included in units redeemed.
</TABLE>
12
<PAGE>
PART C
OTHER INFORMATION
24A. FINANCIAL STATEMENTS
Allstate Life Insurance Company of New York Financial Statements and Financial
Schedule and Allstate Life of New York Separate Account A Financial Statements
are included in Part B of this Registration Statement.
24B. EXHIBITS
Unless otherwise indicated, the following exhibits, which correspond to those
required by Item 24(b) of Form N-4, are filed herewith:
(1) Resolution of the Board of Directors of Allstate Life Insurance Company of
New York authorizing establishment of the Allstate Life of New York
Separate Account A, (Incorporated herein by reference to Post-Effective
Amendment No. 3 to Registrant's Form N-4 Registration Statement (File No.
033-65381) dated April 30, 1999.)
(2) Not Applicable
(3) Form of Underwriting Agreement (Previously filed in the initial filing of
this Registration Statement (File No. 333-93889) dated December 30, 1999.)
(4) Form of Contract (Previously filed in the initial filing of this
Registration Statement (File No. 333-93889) dated December 30, 1999.)
(5) Form of Application for a Contract (Previously filed in the initial filing
of this Registration Statement (File No. 333-93889) dated December 30,
1999.)
(6) (a) Restated Certificate of Incorporation of Allstate Life Insurance
Company of New York(Previously filed in Depositor's Form 10-K, dated March
30, 1999 and incorporated herein by reference.)
(b)Amended By-laws of Allstate Life Insurance Company of New York
(Previously filed in Depositor's Form 10-K, dated March 30, 1999 and
incorporated herein by reference.)
(7) Not applicable
(8) Form of Participation Agreement (Previously filed in the initial filing of
this Registration Statement (File No. 333-93889) dated December 30, 1999.)
(9) Opinion of Michael J. Velotta, Vice President, Secretary and General
Counsel of Allstate Life Insurance Company of New York (Previously filed in
the initial filing of this Registration Statement (File No. 333-93889)
dated December 30, 1999.)
(10) (a) Independent Auditors' Consent
(b) Consent of Freedman, Levy, Kroll & Simonds
(11) Not applicable
(12) Not applicable
(13) Schedule of Computation of Performance Quotations
(14) Not applicable
(99) Powers of Attorney
<PAGE>
25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
<TABLE>
<CAPTION>
<S> <C>
NAME AND PRINCIPAL POSITION AND OFFICE WITH
BUSINESS ADDRESS* DEPOSITOR OF THE ACCOUNT
Thomas J. Wilson, II Director and President
Michael J. Velotta Director, Vice President, Secretary and General Counsel
Marcia D. Alazraki Director
Marla G. Friedman Director and Vice President
Vincent A. Fusco Director and Chief Operations Officer
Cleveland Johnson, Jr. Director
Kenneth R. O'Brien Director
John R. Raben, Jr. Director
Leonard G. Sherman Director
Sally A. Slacke Director
Kevin R. Slawin Director and Vice President
Patricia W. Wilson Director and Assistant Vice President
Karen C. Gardner Vice President
Samuel H. Pilch Controller
Casey J. Sylla Chief Investment Officer
James P. Zils Treasurer
Sharmaine M. Miller Chief Administrative Officer
Richard L. Baker Assistant Vice President
D. Steven Boger Assistant Vice President
Patricia A. Coffey Assistant Vice President
Adrian B. Corbiere Assistant Vice President
Dorothy E. Even Assistant Vice President
John M. Goense Assistant Vice President
Judith P. Greffin Assistant Vice President
Keith A. Hauschildt Assistant Vice President
Ronald Johnson Assistant Vice President
Charles D. Mires Assistant Vice President
Barry S. Paul Assistant Vice President
C. Nelson Strom Assistant Vice President and Corporate Actuary
Timothy N. Vander Pas Assistant Vice President
David A. Walsh Assistant Vice President
Joanne M. Derrig Assistant Secretary and Assistant General Counsel
Emma M. Kalaidjian Assistant Secretary
Paul N. Kierig Assistant Secretary
Mary J. McGinn Assistant Secretary
Ralph A. Bergholtz Assistant Treasurer
Mark A. Bishop Assistant Treasurer
Robert B. Bodett Assistant Treasurer
Barbara S. Brown Assistant Treasurer
Rhonda Hoops Assistant Treasurer
Peter S. Horos Assistant Treasurer
Thomas C. Jensen Assistant Treasurer
Kathleen A. Knudson Assistant Treasurer
David L. Kocourek Assistant Treasurer
Daniel C. Leimbach Assistant Treasurer
Beth K. Marder Assistant Treasurer
Jeffrey A. Mazer Assistant Treasurer
Ronald A. Mendel Assistant Treasurer
Stephen J. Stone Assistant Treasurer
R. Steven Taylor Assistant Treasurer
Louise J. Walton Assistant Treasurer
Jerry D. Zinkula Assistant Treasurer
</TABLE>
*The principal business address of Mr. Fusco is One Allstate Drive, P.O. Box
9095, Farmingville, New York 11738. The principal business address of Ms.
Alazraki is 1675 Broadway, New York, New York, 10019. The principal business
address of Mr. Johnson is 47 Doral Lane, Bay Shore, New York 11706. The
principal business address of Mr. O'Brien is 165 E. Loines Avenue, Merrick, New
York 11566. The principal business address of Mr. Raben is 60 Wall Street, 15th
Floor, New York, New York 10260. The principal business address of Ms. Slacke is
8 John Way, Islandia, New York 11788. The principal business address of the
other foregoing officers and directors is 3100 Sanders Road, Northbrook,
Illinois 60062.
26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH DEPOSITOR OR REGISTRANT
Incorporated herein by reference to Annual Report on Form 10-K, filed by the
Allstate Corporation on March 28, 2000 (File No. 1-11840).
27. NUMBER OF CONTRACT OWNERS
As of the date of the filing of this Registration Statement, the offering of the
Scudder Horizon Advantage Variable Annuity Contract had not commenced.
28. INDEMNIFICATION
The by-laws of both Allstate Life Insurance Company of New York (Depositor) and
ALFS, Inc. (Principal Underwriter), provide for the indemnification of its
Directors, Officers and Controlling Persons, against expenses, judgments, fines
and amounts paid in settlement as incurred by such person, if such person acted
properly. No indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be liable for
negligence or misconduct in the performance of a duty to the company, unless a
court determines such person is entitled to such indemnity.
Insofar as indemnification for liability arising out of the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than payment by the registrant of expenses incurred by a
director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of is counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
29A. RELATIONSHIP OF PRINCIPAL UNDERWRITER TO OTHER INVESTMENT COMPANIES
(a) ALFS, Inc. also acts as a principal underwriter to the following investment
companies:
Allstate Financial Advisors Separate Account 1
Charter National Variable Account
Charter National Variable Annuity Account
Glenbrook Life Multi-Manager Variable Account
Glenbrook Life and Annuity Company Separate Account A
Glenbrook Life AIM Variable Life Separate Account A
Glenbrook Life and Annuity Company Variable Annuity Account
Glenbrook Life Variable Life Separate Account A
Glenbrook Life Scudder Variable Account (A)
Intramerica Variable Annuity Account
Lincoln Benefit Life Variable Annuity Account
Lincoln Benefit Life Variable Account
(b) The directors and officers of the principal underwriter are:
<TABLE>
<CAPTION>
<S> <C>
Name and Principal Business Positions and Offices with Underwriter
Address* of Each Such Person
Thomas J. Wilson, II Director
Kevin R. Slawin Director
Michael J. Velotta Director and Secretary
John R. Hunter President and Chief Executive Officer
Janet M. Albers Vice President and Controller
Brent H. Hamann Vice President
Andrea J. Schur Vice President
Terry R. Young General Counsel and Assistant Secretary
James P. Zils Treasurer
Lisa A. Burnell Assistant Vice President and Compliance Officer
Joanne M. Derrig Assistant Secretary and Assistant General Counsel
Emma M. Kalaidjian Assistant Secretary
Carol S. Watson Assistant Secretary
Barry S. Paul Assistant Treasurer
</TABLE>
* The principal business address of Ms. Watson is 2940 South 84th Street,
Lincoln, Nebraska 68506. The principal business address of the other foregoing
officers and directors is 3100 Sanders Road, Northbrook, Illinois 60062.
(c) Compensation of ALFS, Inc. None
30. LOCATION OF ACCOUNTS AND RECORDS
The Depositor, Allstate Life Insurance Company of New York, is located at One
Allstate Drive, P.O. Box 9095, Farmingville, New York 11738.
The Underwriter, ALFS, Inc. is located at 3100 Sanders Road, Northbrook,
Illinois 60062.
Each company maintains those accounts and records required to be maintained
pursuant to Section 31(a) of the Investment Company Act and the rules
promulgated thereunder.
31. MANAGEMENT SERVICES
None
32. UNDERTAKINGS
The Registrant undertakes to file a post-effective amendment to the Registration
Statement as frequently as is necessary to ensure that the audited financial
statements in the Registration statement are never more than 16 months old for
so long as payments under the variable annuity contracts may be accepted.
Registrant furthermore agrees to include either, as part of any prospectus or
application to purchase a contract offered by the prospectus, a toll-free number
that an applicant can call to request a Statement of Additional Information or a
post card or similar written communication that the applicant can remove to send
for a Statement of Additional Information. Finally, the Registrant agrees to
deliver any Statement of Additional Information and any Financial Statements
required to be made available under this Form N-4 promptly upon written or oral
request.
33. REPRESENTATIONS PURSUANT TO SECTION 403(B) OF THE INTERNAL REVENUE CODE
Allstate Life Insurance Company of New York represents that it is relying upon a
November 28, 1988 Securities and Exchange Commission no-action letter issued to
the American Council of Life Insurance and that the provisions of paragraphs 1-4
of the no-action letter have been complied with.
34. REPRESENTATION REGARDING CONTRACT EXPENSES
Allstate Life Insurance Company of New York represents that the fees and charges
deducted under the Contracts described in this Registration Statement, in the
aggregate, are reasonable in relation to the services rendered, the expenses
expected to be incurred, and the risks assumed by Allstate Life Insurance
Company of New York under the Contracts. Allstate Life Insurance Company of New
York bases its representation on its assessment of all of the facts and
circumstances, including such relevant factors as: the nature and extent of such
services, expenses and risks; the need for Allstate Life Insurance Company of
New York to earn a profit; the degree to which the Contracts include innovative
features; and the regulatory standards for exemptive relief under the Investment
Company Act of 1940 used prior to October 1996, including the range of industry
practice. This representation applies to all Contracts sold pursuant to this
Registration Statement, including those sold on the terms specifically described
in the prospectus(es) contained herein, or any variations therein, based on
supplements, endorsements, or riders to any Contracts or prospectus(es), or
otherwise.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant, Allstate Life of New York Separate Account A, has caused
this amended Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the Township of Northfield, State of
Illinois, on the 17th day of May, 2000.
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
(REGISTRANT)
BY: ALLSTATE LIFE INSURANCE COMPANY OF
NEW YORK
(DEPOSITOR)
By: /s/MICHAEL J. VELOTTA
----------------------
Michael J. Velotta
Vice President, Secretary and
General Counsel
As required by the Securities Act of 1933, this amended Registration Statement
has been duly signed below by the following Directors and Officers of Allstate
Life Insurance Company of New York on the 17th day of May, 2000.
*/THOMAS J. WILSON, II President and Director
- ---------------------- (Principal Executive Officer)
Thomas J. Wilson, II
*/VINCENT A. FUSCO Chief Operations Officer and Director
- ----------------------------
Vincent A. Fusco
/s/MICHAEL J. VELOTTA Vice President, Secretary, General
- ----------------------- Counsel and Director
Michael J. Velotta
*/KEVIN R. SLAWIN Vice President and Director
- ------------------ (Principal Financial Officer)
Kevin R. Slawin
*/MARLA G. FRIEDMAN Vice President and Director
- ----------------------
Marla G. Friedman
*/SAMUEL J. PILCH Controller
- ---------------------- (Principal Accounting Officer)
Samuel H. Pilch
*/CASEY J. SYLLA Chief Investment Officer
- ----------------------
Casey J. Sylla
*/MARCIA D. ALAZRAKI Director
- --------------------
Marcia D. Alazraki
*/CLEVELAND JOHNSON, JR. Director
- ------------------------
Cleveland Johnson, Jr.
*/KENNETH R. O'BRIEN Director
- ------------------------
Kenneth R. O'Brien
*/JOHN R. RABEN, JR. Director
- ---------------------
John R. Raben, Jr.
*/LEONARD G. SHERMAN Director
- ------------------------
Leonard G. Sherman
*/SALLY A. SLACKE Director
- ---------------------
Sally A. Slacke
*/PATRICIA W. WILSON Assistant Vice President and Director
- ------------------------
Patricia W. Wilson
*/ By Michael J. Velotta, pursuant to Powers of Attorney filed herewith.
<PAGE>
Exhibit Index
10(a) Independent Auditors' Consent
10(b) Consent of Freedman, Levy, Kroll & Simonds
13 Performance Data Calculations
99 Powers of Attorney
10(a) Independent Auditors' Consent
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Pre-Effective Amendment No. 1 to Registration
Statement No. 333-93889 of Allstate Life of New York Separate Account A of
Allstate Life Insurance Company of New York on Form N-4 of our report dated
February 25, 2000 relating to the financial statements and the related financial
statement schedules of Allstate Life Insurance Company of New York, and our
report dated March 27, 2000 relating to the financial statements of Allstate
Life of New York Separate Account A, appearing in the Statement of Additional
Information (which is incorporated by reference in the Prospectus of Allstate
Life of New York Separate Account A of Allstate Life Insurance Company of New
York), which is part of such Registration Statement, and to the reference to us
under the heading "Experts" in such Prospectus and Statement of Additional
Information.
/s/ DELOITTE & TOUCHE LLP
Chicago, Illinois
May 17, 2000
<PAGE>
10(b) Consent of Freedman, Levy, Kroll & Simonds
FREEDMAN, LEVY, KROLL & SIMONDS
CONSENT OF
FREEDMAN, LEVY, KROLL & SIMONDS
We hereby consent to the reference to our firm under the caption "Legal
Matters" in the prospectus contained in Pre-Effective Amendment No. 1 to the
Form N-4 Registration Statement of Allstate Life of New York Separate Account A
(File No. 333-93889).
/s/ Freedman, Levy, Kroll & Simonds
FREEDMAN, LEVY, KROLL & SIMONDS
Washington, D.C.
May 17, 2000
<TABLE>
<CAPTION>
AUVs
Base Today One Month Ago Three Months Ago Six Months Ago End of Last Year
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Money Market 10.464236 10.42107 10.341286 10.232524 10.035879
Bond 9.830072 9.851095 9.817146 9.834545 9.994035
Balanced 12.164074 11.672687 10.899726 11.191841 10.622606
Capital Growth 14.381711 13.056461 11.53856 11.851345 10.709504
International 15.924717 13.905168 12.360691 11.376842 10.378986
Growth and Income 10.584141 10.300581 9.983758 11.222592 10.047764
Global Discovery 17.88665 15.425847 12.711297 11.984738 10.858406
Large Company Growth 13.536889 12.250196 10.785494 10.821266 #N/A
Small Company Growth 17.584851 14.590781 12.148271 11.154239 #N/A
Enhanced DB
Money Market 10.45279 10.410564 10.3326 10.226532 10.035018
Bond 9.819326 9.841167 9.808906 9.828792 9.99318
Balanced 12.150783 11.660931 10.890584 11.185295 10.621697
Capital Growth 14.366022 13.043327 11.528893 11.844422 10.708587
International 15.907348 13.891183 12.350334 11.370191 10.3781
Growth and Income 10.572574 10.290207 9.975381 11.21603 10.046906
Global Discovery 17.867155 15.410344 12.70065 11.977737 10.857478
Large Company Growth 13.527852 12.243062 10.781027 10.819529 #N/A
Small Company Growth 17.573145 14.582309 12.143253 11.152456 #N/A
<PAGE>
AUVs
Portfolio Subaccount
Base One Year Ago Three Years Ago Five Years Ago Ten Years Ago Inception Date Inception Date
-----------------------------------------------------------------------------------------------------------
Money Market 10.035879 9.196671 8.399714 6.93771 5.300287 10
Bond 9.994035 8.717445 7.276522 5.178486 3.712463 10
Balanced 10.622606 7.040822 5.038277 3.722987 2.181973 10
Capital Growth 10.709504 6.492436 4.218544 2.94084 1.52921 10
International 10.378986 8.145153 6.446421 4.933408 3.488881 10
Growth and Income 10.047764 7.306083 4.603928 #N/A 4.409 10
Global Discovery 10.858406 8.414793 #N/A #N/A 8.013543 10
Large Company Growth #N/A #N/A #N/A #N/A 10 10
Small Company Growth #N/A #N/A #N/A #N/A 10 10
Enhanced DB
Money Market 10.035018 9.214362 8.432797 7.000097 5.371868 10
Bond 9.99318 8.734276 7.305278 5.225108 3.762648 10
Balanced 10.621697 7.054402 5.058174 3.756479 2.211435 10
Capital Growth 10.708587 6.504956 4.2352 2.967397 1.549931 10
International 10.3781 8.160888 6.471911 4.977929 3.529807 10
Growth and Income 10.046906 7.320205 4.622139 #N/A 4.429392 10
Global Discovery 10.857478 8.431029 #N/A #N/A 8.034405 10
Large Company Growth #N/A #N/A #N/A #N/A 10 10
Small Company Growth #N/A #N/A #N/A #N/A 10 10
Returns
Since Inception Since Inception
Base Three Year Five Year Ten Year of Portfolio of Subaccount
------------------------------------------------------------------------------------------------
Money Market 4.40% 4.49% 4.20% 4.82% 4.27%
Bond 4.09% 6.20% 6.62% 6.97% -1.57%
Balanced 19.99% 19.28% 12.57% 12.62% 19.80%
Capital Growth 30.36% 27.80% 17.20% 16.77% 39.82%
International 25.04% 19.83% 12.43% 12.73% 53.60%
Growth and Income 13.15% 18.12% #N/A 16.72% 5.38%
Global Discovery 28.58% #N/A #N/A 24.49% 70.97%
Large Company Growth #N/A #N/A #N/A 57.94% 57.94%
Small Company Growth #N/A #N/A #N/A 134.42% 134.42%
Enhanced DB
Money Market 4.29% 4.39% 4.09% 4.71% 4.17%
Bond 3.98% 6.09% 6.51% 6.86% -1.67%
Balanced 19.87% 19.16% 12.46% 12.51% 19.68%
Capital Growth 30.23% 27.67% 17.08% 16.65% 39.68%
International 24.92% 19.71% 12.32% 12.62% 53.44%
Growth and Income 13.04% 18.00% #N/A 16.60% 5.27%
Global Discovery 28.45% #N/A #N/A 24.36% 70.80%
Large Company Growth #N/A #N/A #N/A 57.78% 57.78%
Small Company Growth #N/A #N/A #N/A 134.18% 134.18%
AUVs
Portfolio Subaccount
Base One Year Ago Three Years Ago Five Years Ago Ten Years Ago Inception DateInception Date
-----------------------------------------------------------------------------------------------
Money Market 10.035879 9.196671 8.399714 6.93771 5.300287 10
Bond 9.994035 8.717445 7.276522 5.178486 3.712463 10
Balanced 10.622606 7.040822 5.038277 3.722987 2.181973 10
Capital Growth 10.709504 6.492436 4.218544 2.94084 1.52921 10
International 10.378986 8.145153 6.446421 4.933408 3.488881 10
Growth and Income 10.047764 7.306083 4.603928 #N/A 4.409 10
Global Discovery 10.858406 8.414793 #N/A #N/A 8.013543 10
Large Company Growth #N/A #N/A #N/A #N/A 10 10
Small Company Growth #N/A #N/A #N/A #N/A 10 10
Enhanced DB
Money Market 10.035018 9.214362 8.432797 7.000097 5.371868 10
Bond 9.99318 8.734276 7.305278 5.225108 3.762648 10
Balanced 10.621697 7.054402 5.058174 3.756479 2.211435 10
Capital Growth 10.708587 6.504956 4.2352 2.967397 1.549931 10
International 10.3781 8.160888 6.471911 4.977929 3.529807 10
Growth and Income 10.046906 7.320205 4.622139 #N/A 4.429392 10
Global Discovery 10.857478 8.431029 #N/A #N/A 8.034405 10
Large Company Growth #N/A #N/A #N/A #N/A 10 10
Small Company Growth #N/A #N/A #N/A #N/A 10 10
<PAGE>
Returns
Base One Month Three Month Six Month YTD One Year
------------------------------------------------------------------------------------------------------
Money Market 0.41% 1.19% 2.26% 4.27% 4.27%
Bond -0.21% 0.13% -0.05% -1.64% -1.64%
Balanced 4.21% 11.60% 8.69% 14.51% 14.51%
Capital Growth 10.15% 24.64% 21.35% 34.29% 34.29%
International 14.52% 28.83% 39.97% 53.43% 53.43%
Growth and Income 2.75% 6.01% -5.69% 5.34% 5.34%
Global Discovery 15.95% 40.71% 49.25% 64.73% 64.73%
Large Company Growth 10.50% 25.51% 25.10% #N/A #N/A
Small Company Growth 20.52% 44.75% 57.65% #N/A #N/A
Enhanced DB
Money Market 0.41% 1.16% 2.21% 4.16% 4.16%
Bond -0.22% 0.11% -0.10% -1.74% -1.74%
Balanced 4.20% 11.57% 8.63% 14.40% 14.40%
Capital Growth 10.14% 24.61% 21.29% 34.15% 34.15%
International 14.51% 28.80% 39.90% 53.28% 53.28%
Growth and Income 2.74% 5.99% -5.74% 5.23% 5.23%
Global Discovery 15.94% 40.68% 49.17% 64.56% 64.56%
Large Company Growth 10.49% 25.48% 25.03% #N/A #N/A
Small Company Growth 20.51% 44.72% 57.57% #N/A #N/A
Returns
Since Inception Since Inception
Base Three Year Five Year Ten Year of Portfolio of Subaccount
-------------------------------------------------------------------------------
Money Market 4.40% 4.49% 4.20% 4.82% 4.27%
Bond 4.09% 6.20% 6.62% 6.97% -1.57%
Balanced 19.99% 19.28% 12.57% 12.62% 19.80%
Capital Growth 30.36% 27.80% 17.20% 16.77% 39.82%
International 25.04% 19.83% 12.43% 12.73% 53.60%
Growth and Income 13.15% 18.12% #N/A 16.72% 5.38%
Global Discovery 28.58% #N/A #N/A 24.49% 70.97%
Large Company Growth #N/A #N/A #N/A 57.94% 57.94%
Small Company Growth #N/A #N/A #N/A 134.42% 134.42%
Enhanced DB
Money Market 4.29% 4.39% 4.09% 4.71% 4.17%
Bond 3.98% 6.09% 6.51% 6.86% -1.67%
Balanced 19.87% 19.16% 12.46% 12.51% 19.68%
Capital Growth 30.23% 27.67% 17.08% 16.65% 39.68%
International 24.92% 19.71% 12.32% 12.62% 53.44%
Growth and Income 13.04% 18.00% #N/A 16.60% 5.27%
Global Discovery 28.45% #N/A #N/A 24.36% 70.80%
Large Company Growth #N/A #N/A #N/A 57.78% 57.78%
Small Company Growth #N/A #N/A #N/A 134.18% 134.18%
</TABLE>
POWER OF ATTORNEY
WITH RESPECT TO
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
(DEPOSITOR)
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
(REGISTRANT)
THE SCUDDER HORIZON ADVANTAGE VARIABLE ANNUITY
Know all men by these presents that Thomas J. Wilson, II, whose
signature appears below, constitutes and appoints Michael J. Velotta, his
attorney-in-fact, with power of substitution in any and all capacities, to sign
any registration statements and amendments thereto for Allstate Life Insurance
Company of New York (Depositor), Allstate Life of New York Separate Account A
(Registrant) and related Contracts and to file the same, with exhibits thereto
and other documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that said attorney-in-fact, or
his substitute or substitutes, may do or cause to be done by virtue hereof.
May 16, 2000
Date
/s/Thomas J. Wilson, II
- -----------------------
Thomas J. Wilson, II
President and Director
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
(DEPOSITOR)
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
(REGISTRANT)
THE SCUDDER HORIZON ADVANTAGE VARIABLE ANNUITY
Know all men by these presents that Michael J. Velotta, whose signature
appears below, constitutes and appoints Thomas J. Wilson, II, his
attorney-in-fact, with power of substitution in any and all capacities, to sign
any registration statements and amendments thereto for Allstate Life Insurance
Company of New York (Depositor), Allstate Life of New York Separate Account A
(Registrant) and related Contracts and to file the same, with exhibits thereto
and other documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that said attorney-in-fact, or
his substitute or substitutes, may do or cause to be done by virtue hereof.
May 16, 2000
Date
/s/Michael J. Velotta
- ---------------------
Michael J. Velotta
Vice President, Secretary, General Counsel and Director
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
(DEPOSITOR)
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
(REGISTRANT)
THE SCUDDER HORIZON ADVANTAGE VARIABLE ANNUITY
Know all men by these presents that Vincent A. Fusco, whose signature
appears below, constitutes and appoints Thomas J. Wilson, II and Michael J.
Velotta, and each of them, his attorney-in-fact, with power of substitution in
any and all capacities, to sign any registration statements and amendments
thereto for Allstate Life Insurance Company of New York (Depositor), Allstate
Life of New York Separate Account A (Registrant) and related Contracts and to
file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorney-in-fact, or his substitute or
substitutes, may do or cause to be done by virtue hereof.
May 16, 2000
Date
/s/Vincent A. Fusco
- -------------------
Vincent A. Fusco
Chief Operations Officer and Director
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
(DEPOSITOR)
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
(REGISTRANT)
THE SCUDDER HORIZON ADVANTAGE VARIABLE ANNUITY
Know all men by these presents that Marla G. Friedman, whose signature
appears below, constitutes and appoints Thomas J. Wilson, II and Michael J.
Velotta, and each of them, her attorney-in-fact, with power of substitution in
any and all capacities, to sign any registration statements and amendments
thereto for Allstate Life Insurance Company of New York (Depositor), Allstate
Life of New York Separate Account A (Registrant) and related Contracts and to
file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorney-in-fact, or her substitute or
substitutes, may do or cause to be done by virtue hereof.
May 16, 2000
Date
/s/Marla G. Friedman
- --------------------
Marla G. Friedman
Vice President and Director
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
(DEPOSITOR)
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
(REGISTRANT)
THE SCUDDER HORIZON ADVANTAGE VARIABLE ANNUITY
Know all men by these presents that Kevin R. Slawin, whose signature
appears below, constitutes and appoints Thomas J. Wilson, II and Michael J.
Velotta, and each of them, his attorney-in-fact, with power of substitution in
any and all capacities, to sign any registration statements and amendments
thereto for Allstate Life Insurance Company of New York (Depositor), Allstate
Life of New York Separate Account A (Registrant) and related Contracts and to
file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorney-in-fact, or his substitute or
substitutes, may do or cause to be done by virtue hereof.
May 16, 2000
Date
/s/Kevin R. Slawin
- ------------------
Kevin R. Slawin
Director and Vice President
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
(DEPOSITOR)
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
(REGISTRANT)
THE SCUDDER HORIZON ADVANTAGE VARIABLE ANNUITY
Know all men by these presents that Casey J. Sylla, whose signature
appears below, constitutes and appoints Thomas J. Wilson, II, and Michael J.
Velotta, and each of them, his attorney-in-fact, with power of substitution in
any and all capacities, to sign any registration statements and amendments
thereto for Allstate Life Insurance Company of New York (Depositor), Allstate
Life of New York Separate Account A (Registrant) and related Contracts to file
the same, with exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, hereby ratifying and confirming all
that each of said attorney-in-fact, or his substitute or substitutes, may do or
cause to be done by virtue hereof.
May 16, 2000
Date
/s/ Casey J. Sylla
- -------------------
Casey J. Sylla
Chief Investment Officer
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
(DEPOSITOR)
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
(REGISTRANT)
THE SCUDDER HORIZON ADVANTAGE VARIABLE ANNUITY
Know all men by these presents that Samuel H. Pilch, whose signature
appears below, constitutes and appoints Thomas J. Wilson, II, and Michael J.
Velotta, and each of them, his attorney-in-fact, with power of substitution in
any and all capacities, to sign any registration statements and amendments
thereto for Allstate Life Insurance Company of New York (Depositor), Allstate
Life of New York Separate Account A (Registrant) and related Contracts to file
the same, with exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, hereby ratifying and confirming all
that each of said attorney-in-fact, or his substitute or substitutes, may do or
cause to be done by virtue hereof.
May 16, 2000
Date
/s/ Samuel H. Pilch
- --------------------
Samuel H. Pilch
Controller
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
(DEPOSITOR)
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
(REGISTRANT)
THE SCUDDER HORIZON ADVANTAGE VARIABLE ANNUITY
Know all men by these presents that Marcia D. Alazraki, whose signature
appears below, constitutes and appoints Thomas J. Wilson, II, and Michael J.
Velotta, and each of them, her attorney-in-fact, with power of substitution in
any and all capacities, to sign any registration statements and amendments
thereto for Allstate Life Insurance Company of New York (Depositor), Allstate
Life of New York Separate Account A (Registrant) and related Contracts and to
file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorney-in-fact, or her substitute or
substitutes, may do or cause to be done by virtue hereof.
May 16, 2000
Date
/s/ Marcia D. Alazraki
- -----------------------
Marcia D. Alazraki
Director
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
(DEPOSITOR)
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
(REGISTRANT)
THE SCUDDER HORIZON ADVANTAGE VARIABLE ANNUITY
Know all men by these presents that Cleveland Johnson, Jr., whose
signature appears below, constitutes and appoints Thomas J. Wilson, II, and
Michael J. Velotta, and each of them, his attorney-in-fact, with power of
substitution in any and all capacities, to sign any registration statements and
amendments thereto for Allstate Life Insurance Company of New York (Depositor),
Allstate Life of New York Separate Account A (Registrant) and related Contracts
and to file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorney-in-fact, or his substitute or
substitutes, may do or cause to be done by virtue hereof.
May 16, 2000
Date
/s/ Cleveland Johnson, Jr.
- ---------------------------
Cleveland Johnson, Jr.
Director
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
(DEPOSITOR)
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
(REGISTRANT)
THE SCUDDER HORIZON ADVANTAGE VARIABLE ANNUITY
Know all men by these presents that Kenneth R. O'Brien, whose signature
appears below, constitutes and appoints Thomas J. Wilson, II, and Michael J.
Velotta, and each of them, his attorney-in-fact, with power of substitution in
any and all capacities, to sign any registration statements and amendments
thereto for Allstate Life Insurance Company of New York (Depositor), Allstate
Life of New York Separate Account A (Registrant) and related Contracts and to
file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorney-in-fact, or his substitute or
substitutes, may do or cause to be done by virtue hereof.
May 16, 2000
Date
/s/ Kenneth R. O'Brien
- -----------------------
Kenneth R. O'Brien
Director
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
(DEPOSITOR)
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
(REGISTRANT)
THE SCUDDER HORIZON ADVANTAGE VARIABLE ANNUITY
Know all men by these presents that John R. Raben, Jr., whose signature
appears below, constitutes and appoints Thomas J. Wilson, II, and Michael J.
Velotta, and each of them, his attorney-in-fact, with power of substitution in
any and all capacities, to sign any registration statements and amendments
thereto for Allstate Life Insurance Company of New York (Depositor), Allstate
Life of New York Separate Account A (Registrant) and related Contracts and to
file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorney-in-fact, or his substitute or
substitutes, may do or cause to be done by virtue hereof.
May 16, 2000
Date
/s/ John R. Raben, Jr.
- -----------------------
John R. Raben, Jr.
Director
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
(DEPOSITOR)
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
(REGISTRANT)
THE SCUDDER HORIZON ADVANTAGE VARIABLE ANNUITY
Know all men by these presents that Sally A. Slacke, whose signature
appears below, constitutes and appoints Thomas J. Wilson, II, and Michael J.
Velotta, and each of them, her attorney-in-fact, with power of substitution in
any and all capacities, to sign any registration statements and amendments
thereto for Allstate Life Insurance Company of New York (Depositor), Allstate
Life of New York Separate Account A (Registrant) and related Contracts and to
file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorney-in-fact, or her substitute or
substitutes, may do or cause to be done by virtue hereof.
May 16, 2000
Date
/s/ Sally A. Slacke
- --------------------
Sally A. Slacke
Director
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
(DEPOSITOR)
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
(REGISTRANT)
THE SCUDDER HORIZON ADVANTAGE VARIABLE ANNUITY
Know all men by these presents that Leonard G. Sherman, whose signature
appears below, constitutes and appoints Thomas J. Wilson, II, and Michael J.
Velotta, and each of them, his attorney-in-fact, with power of substitution in
any and all capacities, to sign any registration statements and amendments
thereto for Allstate Life Insurance Company of New York (Depositor), Allstate
Life of New York Separate Account A (Registrant) and related Contracts and to
file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorney-in-fact, or his substitute or
substitutes, may do or cause to be done by virtue hereof.
May 16, 2000
Date
/s/ Leonard G. Sherman
- -----------------------
Leonard G. Sherman
Director
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
(DEPOSITOR)
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
(REGISTRANT)
THE SCUDDER HORIZON ADVANTAGE VARIABLE ANNUITY
Know all men by these presents that Patricia W. Wilson, whose signature
appears below, constitutes and appoints Thomas J. Wilson, II, and Michael J.
Velotta, and each of them, her attorney-in-fact, with power of substitution in
any and all capacities, to sign any registration statements and amendments
thereto for Allstate Life Insurance Company of New York (Depositor), Allstate
Life of New York Separate Account A (Registrant) and related Contracts and to
file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorney-in-fact, or her substitute or
substitutes, may do or cause to be done by virtue hereof.
May 16, 2000
Date
/s/ Patricia W. Wilson
- -----------------------
Patricia W. Wilson
Assistant Vice President and Director
